The impact of immigration on the Spanish economy

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The impact of immigration on the Spanish economy

Libertad González (Universitat Pompeu Fabra)

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1. Magnitude of recent immigration

•  The foreign-born fraction of the working-age population increased from 2 to 16% in 10 years (1998-2008). – More than 5 million people!

•  Significant slowdown since 2008.

•  Large variation across Spanish regions.

3 Source: Padrón municipal (INE)

4 Source: Eurostat

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2. Labor market effects

•  Large impact on total employment!

•  Small (if any) impact on the wages or unemployment rates of natives.

•  Some effect on the labor supply of skilled native women – With young children or elderly dependents – Through cheaper household services

6 Source: EPA (INE)

7 Source: Encuesta Anual de Coste Laboral (INE)

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Regional specialization and trade

•  Small effect on regional specialization (national?).

•  But: Changes in skill intensity at industry level. – Higher share of low-educated workers.

– Mostly in services and construction.

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3. Housing market effects •  The large migration inflows increased the demand for

housing –  Rental and ownership. –  Leading to higher prices and/or construction activity?

•  Immigration also increased labor supply in construction. –  Leading to lower prices and/or higher construction activity?

•  Overall effect? –  Probably the demand effect dominated, and immigration

contributed to the housing market boom.

10 Source: Ministerio de Vivienda

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4. Migration and the recession

•  The foreign-born population stabilized since 2008.

•  Out-migration flows have accelerated.

•  Migration flows seem to respond to economic conditions much more than drive them.

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References •  “How Do Very Open Economies Absorb Large

Immigration Flows? Evidence from Spanish Regions.” (with Francesc Ortega) Labour Economics 18: 57-70 (2011).

•  “Immigration, Family Responsibilities and the Labor Supply of Skilled Native Women” (with Lidia Farre and Francesc Ortega). The B.E. Journal of Economic Analysis & Policy: Vol. 11: Iss. 1 (Contributions), Article 34 (2011).

•  “Immigration and Housing Booms: Evidence from Spain” (with Francesc Ortega). CReAM Discussion Paper No 19/09, July 2009.