Late entry into employment and pension reform will delay young people's retirement to 71 years.

The academic world had already warned, following the pension reform designed by former minister José Luis Escrivá, that the implementation of the Intergenerational Equity Mechanism (IEM) would shift a large part of the burden of pension payments from the baby boom generation to younger generations, already burdened by wage insecurity and unemployment. This approach, which the government opted for with the changes, would increase the inequity of the system.

Now, a report by the BBVA Foundation and the Valencian Institute of Economic Research (IVIE) on the "Present and Future of Spanish Youth" also focuses on young people and states that this later entry into the labor market, with an employment rate between 16 and 29 years of age 15 percentage points lower than in 2007 , will make it more difficult to complete sufficiently long careers to obtain a pension at the ordinary retirement age that allows them to maintain their previous standard of living.

According to this study, young people today who retire in 2065 and have only been able to contribute for 30 years will have to compensate for their lower contributions by delaying retirement until age 71. Furthermore, with the latest reform, they will be forced to make greater contributions to Social Security in order to receive a pension with a replacement rate (the ratio of the first pension to the last salary) two percentage points lower than the current one.

The authors of the study warn that if the reforms currently being implemented in other neighboring countries were also implemented in the future, there would be a drop in the replacement rate of between 10 and 20 additional percentage points. "Young people who start their first job late," they assert, "will have to extend their working life beyond the retirement age established each year to obtain a pension that allows them to maintain their previous standard of living, unless they have sufficient accumulated savings (private pension, inheritance, etc.)."

According to analysts at the BBVA Foundation and the IVIE , with the current legislation, projected to 2065, a gross replacement rate of 90% (roughly equivalent to a net rate of 100%, meaning maintaining the previous standard of living) will be achieved with 40 or more years of contributions and a retirement age of 65. And to achieve the same replacement rate with a 35-year career, retirement will have to be delayed until age 68, and until age 71 with only 30 years of contributions. In this way, the lower social security contributions are offset by fewer years receiving the public pension.

In line with these reflections, the report's authors emphasize that the heterogeneity in the characteristics of young people, and especially their level of education, is reflected in working conditions during the active phase (salaries, length of career, quality of contracts, etc.) and pensions during retirement.

They explain that young people are more exposed to changes in the economic cycle and that the average quality of their jobs is poorer. To reinforce this assertion, they detail that 25.3% of young people work part-time, 12 percentage points above the average for the population as a whole, and that the temporary employment rate among employed youth is also double the average, at 34.4% compared to 15.9%.

The salaries received by younger people play a leading role in the study. "A third dimension of their greater job insecurity is salary," they warn. They point out that the salaries of those aged 16 to 29 are 34% lower than the average, and that their income growth throughout their working lives is slower. While previous cohorts reached a contribution base similar to the average before age 27, young adults currently have not yet reached it by age 34.