In Europe, Spain welcomed the largest number of migrants from 2002 to 2007, with its immigrant population more than doubling as 2.5 million people arrived. Spain is the most favoured destination for West Europeans considering a move from their own country and seeking jobs elsewhere in the EU, according to the Financial Times.
In 2005, Spain announced a general amnesty for illegal immigrants. By registering with the relevant authorities, formerly illegal immigrants were able to legitimise their presence in Spain.
EU nationals
Spain recently announced that it will be opening its borders for workers from all EU countries in spring 2006. Therefore, as of that date, if you are an EU national you will not need a work permit to work in Spain — you can enter the country as a tourist and register with the Spanish national employment office (Instituto Nacional de Empleo - INEM) to look for a job. You then have 90 days to find employment — you can obtain an extension after that date or leave Spain and re-enter for a further 90 days. Once you find a job, you will need your employment contract in order to apply for your residence permit.
Non-EU nationals
Non-EU residents who wish to work in Spain must obtain a work permit. They must also obtain a visa before moving to work in Spain.
Work permits must be applied for at the Foreigners' Office (Oficinas de Extranjeros) or to the provincial office of the Ministry of Labour (Delegación Provincial del Ministerio de Trabajo), if you are already in Spain. If you are not in Spain, a work permit must be applied for at the Consular office of your home country.
The provincial labour offices (Direcciones Provinciales de Trabajo, Seguridad Social y Asuntos Sociales) will decide whether the work permit will be issued or not.
As mentioned, the arrival of immigrants in Spain has undoubtedly been the most significant socio-economic phenomenon of recent years. Between 2000 and 2004, the immigrant population multiplied by more than three, from 0.9 million to nearly 2.8 million. Moreover, this influx of immigrants was greater than the number of those legalised (see Graph 6), leading to the appearance of a group of persons (more than 0.8 million in 2004) in an irregular situation, working in the underground economy. For this reason, at the beginning of 2005, in the framework of the Social Dialogue, a normalisation process was initiated, which has brought some 0.7 million persons into the labour market.
Immigration demand has enhanced public services like healthcare,
education and housing. However, perhaps the most immediate
effects impinge on the labour market. At the end of the nineties, it was
a feature of this market that there was a very limited supply of labour
in some sectors, meaning that the equilibrium wage was very high.
The entry of immigrants in recent years has increased the labour
supply, with various consequences for employment rates and wages,
depending on the characteristics of the immigrants themselves.
Recent studies show that the phenomenon of immigration does
not only not reduce employment rates but actually raises them, while
wage growth usually adjusts down. Accordingly, in the National
Accounting revision in 2000-2004, the population was upward adjustable
2.1%, while the figure for those in work was up by 4.5%, leading
to a higher occupation rate. Moreover, with the new base, wage earner
remuneration was revised significantly down, by 3.7% in the
2000-2004 mean.
Another of the implications of immigration is the relief it may
represent for the pension system. It must be emphasised that, according
to available projections, this relief will be merely temporary, since the age structure of this immigrant group is very similar to that
of the Spanish population.
These new workers increase the present social contribution receipts, more readily financing the benefits of those now retired, but they also generate future pension entitlements. The final impact of immigration on the dependency rate (the ratio between the population aged over 64 and that of working age) is not defined, and will depend on the continuity of immigration and its impact on the birthrate. In fact, after persistent downward trends until the mid-nineties, the birth-rate has risen in recent years, although this shift is not yet sufficient to alter the long-term diagnosis of the dependency rate and the costs of the public pension system.
As to the specific impact of immigration on per capita income, using once more the previous breakdown, it has already been indicated that both the demographic factor and the employment rate have risen with immigration. Specifically, immigration in the period 2000-2004 raised Spanish per capita income by 2.2% thanks to the sum of both effects. However, to calculate the overall effect of immigration on per capita income, its effect on productivity has also to be considered and which, as will be seen below, is ambiguous. An analysis of this impact must remember that growth of labour productivity can in turn be broken down into the sum of two variables: the contribution of the capital-labour ratio and the growth in total factor productivity (TFP). As already shown, immigrants’ wages are lower than those of Spanish workers, so making the relative cost of labour cheaper, and inducing capital substitution. Therefore immigration has had a contractive impact on work productivity, by reducing the capital-labour ratio.
However, the effect of immigration on the TFP is not clearly determined. On the one hand, the TFP for this group, with lower levels of training and experience than Spanish workers, has to be lower. In fact, compared with Spanish workers, in 2004 there was a higher percentage of immigrant workers with just primary education, and a lower percentage with university studies. However, labour market institutions are another of the decisive factors for TFP. Excessive rigidity in the mobility of labour makes it more difficult for the economy to adjust to economic disruptions, and discourages the adoption of new technologies, so reducing TFP. However, immigrant workers are more mobile, so that immigration helps to diminish such rigidity, raising TFP and, therefore, productivity.
In summary, immigration has not just been a brake on per capita income in absolute terms, as it has raised the employment rate and the demographic factor, and its effect on productivity is not clearly negative. Immigration also has implications for the current account balance of the recipient country. There is a direct negative effect associated with the remittances these immigrants send to their countries of origin: this increase in transfers to the rest of the world raises the current account deficit. This item of the current account balance has risen in percentage terms against GDP since 2000, reaching 0.4% in 2004. Yet, there is in addition an indirect impact, more difficult to measure, associated with the fact that immigrants do not initially have a stock of durable consumer goods, which they have to acquire and which, for the most part, they import from abroad. Thus, foreigners account for about 60% of durable goods purchases.
Before migrating to Spain, it might also be a good idea to prep yourself with the Spanish language, so as to reduce the impact of culture shock and to overcome the language barrier.
Source: Workpermit, La-moncloa
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