Spanish pride: The economic benefits of a lenient migration policy

The Economist has declared Spain the “best economy of 2024.” The secret of its impressive growth involves a robust labor market that features a high share of migrants. Recent reforms have rendered the immigration process even more accessible, which should give the economy an extra boost. However, some Spaniards blame migrants for an increase in crime and the slump in wages for unskilled labor. Dispelling these myths will prove another challenge for the government, but polls already show progress in this regard.

• 1.How to regularize 1 million immigrants
• 2.Why Spain needs migrants
• 3.What could go wrong
• 4.Debunking myths about migrants

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While the U.S., UK, and right-wing EU governments are tightening migration laws, Spain is actively attracting foreigners. In 2024, this policy allowed the country to increase production, and annual GDP growth is forecast to exceed 3%. Meanwhile, unemployment has dropped to its lowest point in more than a decade, and GDP per capita is also on the rise, even if its growth is less pronounced.

Prime Minister Pedro Sanchez is convinced that migrants do not represent an added burden, but a “guarantee of well-being.” Hoping to address the country's demographic and economic challenges, Spanish authorities have recently approved reforms that will further simplify the legalization and integration of foreigners.

How to regularize 1 million immigrants

Adopted in November 2024, Spain’s migration law reform will reduce processing times for immigrants, eliminate duplicative checks, simplify document requirements, introduce a new classification of permits with clear grounds for their issuance, and introduce a 12-month job seeker's visa.

A queue at the border in Ceuta, Spain's African exclave

Renewing visas also promises to become easier via the new online procedure. The updated rules allow students to work up to 30 hours a week, which both helps them pay for school and speeds up integration. Most importantly, the reform is changing the residency mechanism that allows illegal immigrants to legalize their status. The Ministry of Integration predicts that about 900,000 migrants in the country under irregular status will be able to regularize their documents in the next three years. In most cases, proof of residency for the past two years will be sufficient.

Around 900,000 irregular immigrants will be able to regularize their status in Spain in the next three years

Additionally, the mechanism of “second chance residency” was introduced for those who lost residency or were denied asylum but want to remain in the country. However, applicants in this category will have to wait two years from the date of denial before they can apply for a residency permit.

Why Spain needs migrants

Population aging is becoming a serious problem: more than 20% of Spaniards have crossed the 65-year threshold, which puts a strain on pension and healthcare systems. As the U.S.-based Center for Global Development calculated in 2020, the country will need an average of 1,130,000 new workers a year through 2050 if it is to maintain its ratio of wage earners to dependents.

Migrants account for up to 80% of olive harvesters in some regions of Spain

Given the country's declining birth rate, natural population growth will not solve the problem. By 2022, the birth rate among women of Spanish descent had fallen by 4.36%. Meanwhile, among foreign-born mothers, the rate rose by 3.24%, partially offsetting the overall decline.

An influx of able-bodied and relatively young people can help reduce the demographic pressure as well as the labor shortage. The Spanish Central Bank estimates that 43% of companies in the country are struggling from a lack of workers. In some industries, the shortage is more drastic, reaching 64% in hospitality and 56% in construction.

An influx of able-bodied and relatively young adults can both relieve demographic pressure and address the labor shortage

Why aren't these industries hiring from among Spain's own 2.7 million unemployed? The key consideration here is age. Six out of ten unemployed Spaniards are over 45 years old, so work processes and tools in physically demanding industries need to be adapted to their needs.

The harvest of olives, grapes, and other crops is heavily dependent on migrant labor. In some regions, the share of foreign seasonal workers reaches 70-80%. In addition, foreign workers play a key role in health care, taking positions as nurses, caregivers, and orderlies and helping to fill the shortage of geriatric care professionals. The World Health Organization estimates that by 2030, Spain will be short of more than 85,000 nurses and about 30,000 other health industry workers.

Overall, foreigners make up more than 15% of the total labor force in 20 of the country's 50 provinces. Regularization of migrants’ legal status will increase their contribution to the economy through tax revenues. “Every new migrant worker creates an opportunity to support sustainable growth,” Sanchez explained.

Economists confirm his conviction. According to calculations by Raymond Torres of the Funcas think tank, Spain owes half of its economic growth to migrants. Rafael Domenech of BBVA Research adds: “Immigrants are coming because the economy is growing, and their influx in turn gives it an additional boost.”

Spain's migration policy also has a humanistic component. The ruling Spanish Socialist Workers' Party (PSOE) advocates for equality, justice, and inclusion, which Sanchez summarized as follows: “To welcome those coming from outside is our duty and the foundation of the welfare state.”

“We Spaniards are the children of emigration. We're not going to be the parents of xenophobia. Let's create an immigration policy that our ancestors can be proud of. And let's create a migration policy that guarantees a future for posterity,” the prime minister added.

What could go wrong

While inspiring hope, the migration reform also raises concerns: legislative changes alone are never enough without proper enforcement. In this regard, Spain's overloaded administrative system poses a challenge. Migration authorities and consulates are already struggling with the flow of applicants, and an increased workload could end in a bureaucratic collapse, El Paiswrites. The system needs additional human resources and funding — otherwise, the legalization process may drag on for years, causing discontent among both migrants and local communities.

Legal status alone is not enough to integrate migrants into the labor market. They need educational programs to better adapt to the market, and their prospective employers must be incentivized with tax breaks or subsidies. Without these measures, even legalized migrants will face unemployment or end up forced into low-skilled positions — which would reduce the economic benefits of the reform.

Legal status alone is not enough to integrate migrants into the labor market. They need educational programs, and their prospective employers must be incentivized with subsidies

Debunking myths about migrants

The reform debate highlights the numerous migration-related myths and fears that still exist in Spanish society. According to Iseak polls, Spaniards on average believe that migrants make up almost 28% of the country's population — even though in reality they account for only 16%. Right-wing voters generally believe that Spain’s foreign-born population is in excess of 30%. Such misconceptions cause people to be wary of any migration policy relaxation.

Rally for the legalization of migrants in Madrid

An El Pais poll conducted before the start of campaigning for European Parliament elections last year revealed that only 11.2% of respondents viewed migration as one of Spain's main problems. However, in the run-up to the vote, migration became a central topic of debate, bringing this indicator to 16.9% in just one month — from ninth to fourth place on the domestic agenda.

Myth: Migrants increase crime rates

There is a common belief that an influx of migrants leads to an increase in crime. The leader of Spain’s conservative PP (“People's Party”), Alberto Nunez Feijoo, has made this argument more than once, although he prefers to offer hints rather than make direct statements about it. Feijoo once claimed, for example, that “Spaniards have the right to safe streets.”

Meanwhile, as of 2022, 74.19% of convicts in the country were Spanish nationals, and only 25.81% were foreigners. Spain's crime rate has not risen since 2011.

Spain's crime rate has not risen since 2011

While 25.81% is well above the share of Spain’s overall foreign-born population, this does not mean that migrant workers are more likely to commit crimes. “A migrant is a person who moves to another country intending to settle down, and not all foreigners are migrants. Some foreigners are serving sentences for organized crime offenses. They are not migrants but people who came to Spain to commit a crime, were arrested, and convicted,” Antonia Linde, an expert in crime statistics from the Open University of Catalonia, explains to El Pais.

“It is not the immigrant status that explains the propensity to offend,” emphasizes Cesar Alonso-Borrego, professor of economics at Carlos III University of Madrid. He and his co-authors analyzed a Spanish police database from 1999 to 2009 and found no significant impact of migration on the overall crime rate, nor on serious and property-related crime. A positive correlation of 1% was found only for administrative offenses.

Myth: Migrants are taking Spanish jobs

Many Spaniards are concerned that migrants are filling the labor market, leaving locals unemployed. In reality, newcomers occupy vacancies undesirable to locals. In Spain, such positions are abundant in the fields of agriculture, hospitality, mining, and fishing. “The analysis shows that many concerns about the impact of immigration on employment, wages, and public services are due to prejudice and misinformation,” said Raquel Carrasco, a professor in the Department of Economics at Carlos III University of Madrid.

According to a report by the recruitment agency Randstad, 21.72% of Spaniards hold skilled positions. Among foreigners, the figure is only 5.06%. The difference is even greater when comparing the shares of locals and migrants in high-impact and managerial positions, as well as among professionals and technicians.

Almost half of Iseak respondents believe that the abundance of migrants results in lower wages for unskilled workers. However, studies suggest only a minimal impact, with wages temporarily slumping by a mere 0.5%. Meanwhile, only 23% of respondents are aware that tax revenues from migrants exceed the cost of the benefits they receive.

Only 23% of Spaniards are aware that tax revenues from migrants exceed the benefits they receive

Myth: Migrants live off social benefits

More than 65% of those surveyed by Iseak believe that migrants receive more help in the form of benefits and public services than locals do. But in reality, they get 20% less than the local population.

Migrants cannot receive more benefits, as Spain has a cumulative social assistance system. Benefits for unemployment, loss of a spouse, illness, and other types of assistance are provided primarily to regular social security contributors.

“In no way can a foreigner in Spain have priority access to benefits,” explains Professor Ramon Mahia, an expert in international migration economics and politics.

In the pension system, it is migrant taxes that help offset the demographic decline. Among hospital patients, migrants account for only 15%, which is proportionate to their share of the general population.

While belief in these myths remains a problem, education helps fight prejudice. As it turns out, awareness-raising efforts really do change public opinion. 12% of Iseak respondents spoke in favor of integration measures after discovering the truth about migration. However, only 3-5% of respondents expressing strong views showed flexibility in their position.

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