2. Final outcomes
The Basque Country ranks very well with regard to the GDP per capita indicator
Table 3 summarises the position of the Basque Country with regard to final outcome indicators, those which measure social wellbeing targets. Consequently, this includes both purely economic performance and more social indicators of performance. The Basque Country continues to rank very well with regard to the GDP per capita indicator, moving up several positions compared to the previous year. The Basque Country also ranks very well in terms of household disposable income, an indicator which both the OECD and Eurostat consider more appropriate for measuring the development of the population’s level of wellbeing, as it rectifies some of the reasons why GDP, which measures what is produced within the territory, does not always have a favourable impact on wellbeing. There are several reasons for this: generating those products may have involved non-resident factors of production (both workers and capital) which divert part of the income generated; for solidarity reasons or others, some of the income may be transferred to other territories (to either other autonomous communities or to developing countries); or the government and firms may appropriate part of the income to reduce their debt level.
Graph 1 shows the variation in the values for these indicators. Following the stagnation experienced by the Basque Country and Spain during the crisis, GDP per capita began to recover in both territories in 2014, something which had already taken place in the other territories under consideration. Strong performance in recent years has enabled Basque GDP per capita (in PPP terms) to exceed average levels in Germany. This had been the case before the crisis, but was cut short during this period due to Germany’s stronger growth. Unfortunately, the data for household disposable income per capita (PPP) are older (2016). They show that all territories experienced stagnation in that year and that, although the Basque Country ranks better than the comparable regions, the EU-28 average and the Spanish average, the gap with Germany was greater than that seen in GDP per capita. It should be pointed out that the comparable regions are performing better than the European average in this indicator (which is not the case for GDP per capita). It will therefore be necessary to pay attention to trends in this indicator in the future. As a complement to this, further on in this section we discuss developments in median household income.
There is still evidence of the greater impact of the crisis on long-term unemployment in Spain and the Basque Country
As regards to indicators of a more social nature and beginning with the level of long-term unemployment, the Basque Country has performed much better than Spain and has been trending positively in absolute terms in recent years. However, it still ranks poorly in relative terms compared to Europe. As Graph 1 shows, this is due to the significant deterioration at the start of the crisis. Although it has made a recovery in absolute terms since 2015, it is still quite a bit higher than the average for the EU-28 and the comparable regions, and even more than Germany.
In contrast, in absolute terms, NEET (percentage of young people aged 15–24 who are not in education, employment or training, which is included as a final outcome indicator because it is an indication of what is most likely undesired employment among the youth population) rates are below the average for Europe, Spain and the comparable regions. This is positive because it indicates that young people are continuing their education in the event that they do not want to or cannot work. Even so, it is important to note that the Basque Country fell a few positions in the last year, due to the fact that, although the value for this indicator continued to drop, it did so to a lesser extent than in the other European regions.
Lastly, as regards to the indicators for which data are available at the regional level in Europe, it is worth mentioning that, despite the increase seen in the last year in absolute terms and dropping a few positions in the rankings, the Basque Country leads European regions in terms of lower poverty rates.
Unlike Spain, the Basque Country has managed to return to low levels of inequality, comparable to its European neighbours
The analysis is rounded out with trends in several indicators that are not available for European regions as a whole, but which we do have for the Basque Country and the European countries. These make it possible to further explore some aspects of economic conditions among the population. The first of these, mentioned earlier, is equivalent to median disposable income (in PPP terms), which is calculated based on the Living Conditions Survey. This indicator standardises household data based on the number of equivalent units of consumption comprising them, taking into account the economies of scale that occur when members of the household share the income. Median income is a better representation of standard of living than average income, because if high-income groups have very high values, the average values may be quite a bit higher than the respective median values. In Graph 1 we can see that, unlike household disposable income per capita, equivalent median income increased in the Basque Country in 2016, then dropped slightly the following year. Even so, these values remain much higher than those for the EU-28 and Spain, and very close to those for Germany.
Another indicator which allows us to evaluate the wellbeing of the population and its vulnerability is the inability to face unexpected financial expenses, also computed using data from the Living Conditions Survey. The Basque Country has had very strong performance in this area, with percentages much lower than the other territories, even during the crisis period, and these have continued to drop since 2014.
Lastly, as regards to income distribution, the S80/S20 index (which measures the ratio between the 20% of people with the highest equivalent per capita income in the income distribution and the 20% of people with the lowest income) indicates that, although inequality increased during the crisis, it has declined again since 2013, approaching the values for the EU-28 and Germany.
It is thus possible to conclude that in a favourable economic context, the majority of the final outcome indicators for the Basque Country have improved and that in general, the region remains in a favourable position in comparison with other territories. Unlike Spain, the Basque Country has managed to return to low levels of inequality, comparable with its European neighbours. However, in some indicators such as long-term unemployment, there is still evidence of the greater impact of the crisis on Spain and the Basque Country. The crisis left in its wake a group of people who have had difficulty re-joining the job market, and although that group has decreased, their numbers continue to be significant.
For more details on calculations for this indicator, see the section on average and median income in the online INE (Spanish National Statistics Institute) publication ‘Indicadores de Calidad de Vida’ (Quality of Life Indicators).