"It's a historic waste," Ms. Allard said. "The economy has not been transformed into a higher-productivity economy even though all those educated young workers were available for the task. I would not be surprised if eventually they rebelled against the tax burden."
"This puts the whole welfare state at risk," said Gayle Allard, a labor-market specialist at Madrid's IE Business School. "The young people who are coming on the market now are the lost generation. They are losing the advantage of their youth and energy, and that does not come back."