The reform of the regulations of the Immigration Law in Spain, which could regularize the situation of some 300,000 people annually, in the next three years, represents both an economic and social challenge.
Immigration affects fundamental factors such as employment, wages, productivity and public finances, which requires reflection on the economic implications of this legislative change. In this context, it is crucial to objectively address two key questions about its implications.
1. Is the regularization of 300,000 people each year acceptable??
The Government has clarified that the figure of 300,000 immigrants per year does not represent a significant increase in regularizations, but is a global figure. For example, more than 200,000 people who lived without proper papers in Spain obtained their authorization via roots last year, which means, therefore, that an increase of 100,000 regularizations is estimated compared to the previous year.
According to the OECDthe main receiving countries of migrants are Germany, the United States and, thirdly, Spain, this being a relatively recent phenomenon in our country.
According to the INEbetween 2008 and 2020, the arrival of more than 300,000 immigrants per year was recorded, reaching a peak of 750,000 in 2019. However, starting with the 2021 Population and Housing Census, the INE has improved its methodology for counting migrations, which makes the data for 2021 and 2022 (888,000 and 1.3 million immigrants, respectively) are not directly comparable with the previous ones. It should be noted that, although measuring migratory flows may seem simple, it is actually a quite complex process. From 2021, the new Migration and Changes of Residence Statisticsis based on registration in the Municipal Register, which, being an essential condition for the exercise of basic rights, records the majority of the migratory flow from abroad.
In light of these data, the regularization of 300,000 people per year (equivalent to 1.5% of the employed population) seems perfectly viable for our labor market, which between 2021 and 2023 generated more than 600,000 jobs annually.. The difference could be more qualitative than quantitative, since regularization would facilitate the transition from the underground economy to the formal economy.
2. What is the economic impact of migratory waves in destination countries?
The IMF’s work reportThe Macroeconomic Effects of Large Immigration Waves‘ (2023) highlights the wave of migration in Spain during the first decade of this century, underlining the notable increase in the percentage of the population born abroad (from 2% in 2000 to 12% in 2011) during a period of economic boom and low levels of unemployment. This example serves the IMF to raise a fundamental question: was immigration the cause of economic growth in Spain or were immigrants attracted by the country’s favorable economic conditions?
To address this question, the report analyzes the economic impact of large waves of migration motivated by the search for better economic conditions, excluding refugee flows that are discussed in a separate section.
The analysis covers 34 countries between 1980 and 2016, considering 229 episodes of “migration shocks.” The main conclusion is that large waves of migration contribute to an increase in both production and productivity with quantifiable effects: an increase in the entry of immigrants equivalent to 1% of a country’s employed population generates an increase in GDP of 1%. % after 5 years.
This implies that an increase of 100,000 immigrants in one year (equivalent to 0.5% of the employed population) could generate an increase of 0.5% of GDP after five years, which would represent more than 7,000 million euros.
In another 2021 IMF work report, titled ‘The Impact of International Migration on Inclusive Growth: A Review‘, various studies are examined on the effects of immigration on wages, employment and public finances.
One of the recurring arguments against immigration is that, in the short term, the arrival of immigrants can affect wages and displace native workers who compete for the same jobs. However, studies that address the impact on employment do not find evidence of negative effects on the native population, while clear beneficial effects are observed in the medium term. As immigrants integrate into the labor market, natives tend to move into new occupations, improve their training and, as a result, increase their productivity.
The economic impact of immigration on public finances occupies a prominent place in public opinion, above the effects on wages or employment. In the short term, immigrants generate greater spending due to the costs associated with their social integration and assistance during the job search. However, the health cost is relatively low, since immigrants tend to be younger. In the medium and long term, once they integrate into the labor market, immigrants contribute a positive net balance to public finances, contributing through the payment of taxes and social contributions.. In societies with an aging population, migration flows play a crucial role in providing a young workforce, easing pressure on the sustainability of the pension system and healthcare.
In conclusion, numerous international studies demonstrate that migratory waves generate a positive impact on productivity, production and employment, due to the complementarity between the positions occupied by natives and immigrants. Furthermore, the integration of immigrants into the formal labor market not only represents a key opportunity to reduce the size of the underground economy, but also to improve long-term demographic prospects, contributing to the sustainability of the economic and social system.
The regularization of immigrants, in addition to promoting justice and social integration, constitutes a crucial opportunity to strengthen and consolidate the economic growth of our country.
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