Spain | Growing with more immigration

Immigration has been a key factor supporting the growth of the Spanish economy in the wake of the pandemic. The labor market, economic and social integration, and training of immigrants all require priority attention from policymakers.

Key points

• Key points:
• Spain is now facing a demographic challenge. The retirement of the baby boomers is causing the labor force to shrink, affecting both economic growth and the sustainability of the welfare state.
• Immigration in the wake of the pandemic is helping to cushion the effects of this and also of the ongoing war in Ukraine and the inflationary crisis. Notably, Spain is growing more than other EU countries.
• Immigration has become a driving force for job creation. According to the Labor Force Survey (EPA), in June 2024 Spain reached record employment of 21.7 million, 1.7 million more than at the end of 2019.
• Most of the immigrants come from Latin America, thus facilitating their labor, linguistic and cultural integration. However, significant differences persist in terms of occupations and educational levels with respect to the native population.
• The increase in the Spanish population due to immigration also exerts additional demand pressure on the housing market, which has become highly strained due to a shortage of supply. Another challenge linked to demography and immigration is the sustainability of the pension system.

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