Madrid is Spain's capital and the country's largest metropolis. With 6.4 million residents in 2016, it accounted for 14% of the Spanish population, compared with Barcelona's 12%. In terms of GDP per capita, it fared 16% above Barcelona and 31% above the rest of the country in 2016, but moderately by Western European standards. Unemployment, albeit low by Spanish standards, remains a concern, as the number of jobs dropped by 3.6% in 2016, depressing household incomes by 7.5% in real terms.
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The city's prominence in business services (this sector provided 22% of the jobs in Madrid, versus 13% elsewhere in Spain, on average) contributes to the superior labour productivity in Madrid compared with other parts of Spain: 31% higher in 2016. Labour productivity (hence wealth in general) in Spain's capital city is below the median of the values in first-tier Western European metropoles.
In 2016, per household disposable income in Madrid was 21% higher than in the rest of the country. The unemployment rate of 16% in 2016 was notably lower than in the rest of Spain (20%). Also, higher labour force participation (78%, versus 74% in the rest of Spain, was employed or actively searching for a job) also contributed to higher incomes in Madrid.
Despite the advantage in earnings, Madrid's households spent on average 3.6% more on consumer items (excluding transport and housing) in 2016. Food is, however, affordable in Madrid: households in the city spent 15% less than those outside the capital city in 2016. This allowed Madrilenos to spend significantly more on education (52% more than elsewhere in Spain).
Combined spending on housing and transport (measured per household) was 27% higher in Madrid compared with the rest of the country in 2016, making the city slightly more expensive than the rest of Spain, given its 21% higher disposable income.