Spain | Towards the Champions League of human capital

The reform of the Foreigners' Regulation may be a step forward in allowing companies to access human capital, easing the restrictions imposed on the Spanish economy by the expected drop in population and the mismatch between demand and supply in some parts of the labor market.

Key points

• Key points:
• Given the trends observed in the birth rate, we know for sure that without immigration, the number of inhabitants will decline. The National Institute of Statistics forecasts that the working-age population (between 16 and 70 years of age) will shrink by 6% between 2020 and 2050.
• If the population does not increase, the size of the Spanish economy will shrink. The fewer the workers, the lower the production capacity.
• Immigration can also contribute to improving productivity. A greater number of people implies greater interaction among them and, therefore, greater capacity to generate new knowledge. The size of the market also allows companies to take advantage of economies of scale.
• The reform can help reduce the mismatch between demand and supply in the labor market. It is positive that people who come to study for a master's degree are allowed to combine their education with work. By facilitating their permanence at the end of their training, they take advantage of the prestige of some universities and business schools to attract talent.
• It is also worth highlighting the advantages that may be brought by the relaxation of the rules for hiring at origin, which should help those companies with particular needs to find workers with the skills they are looking for.

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