Spain has a mixed capitalist economy, which means both the state and the private sector directs the condition of the economy. In terms of per capita income, Spain has the 12th largest economy in the world.
Since 2007, Spain has suffered from high levels of unemployment. By the year 2010, Spain had a record unemployment rate of 18.1 percent, which was due mainly to rigid labor regulations, lay offs and over-generous unemployment benefits. The high cost of unemployment benefits causes wages to increase, which makes employers hesitant about hiring new employees. All of these factors contribute to Spain's weak position in the world economy.