Spain | The challenges of a necessary immigration process

Summary

To avoid a ‘demographic winter’ scenario, Spain needs immigration. But just because it is necessary does not mean that it is sufficient, nor that it does not pose major challenges for the labor market and when it comes to social cohesion.

Key points

• Key points:
• The most recent INE long-term population projections, from October 2022, revealed that over the next five decades the population born in Spain will decrease by 16%, while the foreign-born population will increase by a factor of 2.6, climbing from 15.8% at the beginning of 2023 to 36.5% by 2072.
• These projections have already been surpassed by the most recent data. As of January 1, 2024, the foreign-born population accounted for 18.1% of the total. Spain’s growth in the last three years cannot be properly understood without this growth in the foreign population.
• That immigration will more than offset the decline in the Spanish-born population, allowing the total population to increase by 11.5% in the coming decades, is good news, though also a major challenge. The shrinking and aging population will negatively affect the labor market, the economy and the sustainability of its welfare state.
• When the labor force and employment decline, the likelihood of shortages of workers in key sectors increases, and the potential growth and attractiveness for investment and innovation diminishes.
• While the percentage of employed persons born in Spain with a level of education equal to or lower than lower secondary education had fallen from 32.3% in 2019 to 29.7% at the end of 2023, in the case of the foreign population it had risen from 38.5% to 43.7%.

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