ABSTRACT
Of all the economic problems faced by the democratic regime inaugurated by Spain with the Constitution of 1978, none has proved to be more puzzling to scholars and more intractable to policy-makers than persistently high unemployment. As Spain approached the period of re-democratization that began with the death of General Francisco Franco in 1975, it enjoyed one of Europe's lowest rates of unemployment. 1 Between the years of 1965 and 1974, the unemployment rate stood at 1.5 per cent of the total population. However, by the mid-1980s, when Spain attained the highly elusive status of a consolidated democracy, the nation had developed the most extreme condition of high unemployment among OECD countries. During the critical years of democratic transition and consolidation (1977–86), the average annual unemployment rate stood at 12 per cent. It then climbed to 18.4 per cent between 1986 and 1990. The crisis may have reached its peak in 1994 when the unemployment rate soared to 24 per cent, or 3.7 million of the active population. This dramatic upheaval in the nation's employment picture has led some observers to suggest that with the transition from dictatorship to democracy, Spaniards swapped job security for political freedoms (Balfour 1989: 248).
