142 Priorities supported by indicators Other key priorities

I.3. COUNTRY NOTES
SPAIN
Priorities supported by indicators
Improve educational attainment in secondary education (2005, 2007, 2009)
Recommendations: Introduce standardised school testing in all regions, raise school autonomy, and
limit conditions on moving up to higher grades only for core competencies.
Actions taken: Skill requirements have been raised for new school teachers (2009, legislated in 2006),
as well as for early-childhood education (ongoing). Some regions have introduced centralised testing.
Legislation, introduced in 2006, is being implemented to give public schools more autonomy.
Limit the extent of administrative extension of collective agreements (2005, 2007, 2009)
Recommendations: Allow firms to opt-out of the compulsory application of collectively bargained
wages. Eliminate indexation of wages to past inflation.
Actions taken: No action taken.
➤ Ease employment protection legislation for permanent workers (2005, 2007, 2009)
Recommendations: Reduce the gap in protection between permanent and temporary workers by
lowering severance payments for permanent contracts and curbing the allowed use of temporary
contracts.
Actions taken: The successive use of temporary contracts was limited in 2006. The duration of fiscal
support was extended for hires on permanent contracts with lower severance payments for targeted
groups in the same year.
➤ Strengthen competition in the retail distribution sector (2007, 2009)
Recommendations: Eliminate the numerous barriers to the establishment of new hypermarkets and
shopping centres put in place by regional governments.
Actions taken: New legislation has been introduced to lower entry restrictions for large surface
retailers.
Other key priorities
Remove distortions in the housing market (2005, 2009)
Recommendations: Shorten court procedures to resolve conflicts between landlords and tenants, and
remove tax subsidies for owner-occupiers. Redirect assistance for low-income households away from
social housing towards means-tested housing-related cash benefits.
Actions taken: The ceilings on tax subsidies were lowered slightly in 2006. Legislation is being
considered to limit subsidies to low income households and equalise the tax treatment of owner
occupied and rental housing. Fiscal support has been made available for rental contracts, and new
courts and accelerated procedures have been introduced (with the most recent steps taken end-2009).
Reform the pension system (2005, 2007)
Recommendations: Pensions should become actuarially more neutral.
Actions taken: Partial retirement was restricted and the effective contribution period to acquire
pension rights was increased modestly in 2007. Stronger incentives to extend work beyond the current
age at which full pension rights can be acquired were introduced at the same time.
142
ECONOMIC POLICY REFORMS: GOING FOR GROWTH © OECD 2010
I.3. COUNTRY NOTES
SPAIN
● Convergence in GDP per capita relative to the upper half of OECD countries has slowed though the picture is
more favourable in current prices. Recently the productivity gap has begun to narrow.
● While significant progress has been made in most key priority areas, they remain core priorities. School
dropout rates remain high and accountability is still weak. Housing market distortions and use of precarious
employment contracts remain widespread. No progress has been made in reforming wage bargaining.
● In other areas, much progress has been made in making regulation in product markets more conducive to
competition, including through a new competition law and reform in network industries.
A. Gaps in GDP per capita and productivity
are persistent
Gap to the upper half of OECD countries1
Per cent
0
B. Secondary school attainment and achievement
could be further enhanced
120
GDP per capita
2003
GDP per hour worked
2007
100
-10
80
-20
60
-30
40
-40
20
09
07
C. Regulations in the retail sector
have been eased4
20
20
05
03
20
20
01
97
99
20
19
95
19
93
19
19
19
91
-50
UpperPISA
secondary (%)2
scores3
Spain
UpperPISA
secondary (%)2
scores3
EU19
0
D. Employment protection legislation
remains stringent4
Index
4
Index
4
1998
2003
2008
2003
2006
2008
3
3
2
2
1
1
0
0
Spain
EU19
OECD
Regular
Temporary
Spain
Regular
Temporary
OECD
1. Percentage gap with respect to the simple average of the upper half of OECD countries in terms of GDP per capita and GDP per hour
worked (in constant 2005 PPPs). The gaps for 2009 are OECD estimates, based on the OECD Economic Outlook, No. 86.
2. Percentage of population aged 25-34 that has attained at least upper-secondary education.
3. Average mean score of student performance in mathematics, science and reading in 2006. Index OECD = 100.
4. Index scale of 0-6 from least to most restrictive.
Source: Chart A: OECD, National Accounts and Economic Outlook 86 Databases; Chart B: OECD (2009), Education at a Glance and OECD, PISA 2006
Database; Chart D: Venn, D. (2009), “Updating the OECD Employment Protection Indicators”, OECD Social, Employment and Migration Working
Papers, No. 89 and OECD analysis based on OECD Employment Outlook methodology.
1 2 http://dx.doi.org/10.1787/786611566183
ECONOMIC POLICY REFORMS: GOING FOR GROWTH © OECD 2010
143