Immigration Mitigates Spain's Economic Challenges Amid Aging Population

Spain is currently grappling with significant demographic aging, a trend that threatens to shrink its working-age population and hamper economic growth. Two recent studies by Fedea, analyzed by economists Ignacio Conde-Ruiz, Clara I. González, and Miguel Díaz-Salazar, underline the crucial economic role immigration has played in counteracting these adverse trends.

Between 2000 and 2019, Spain’s working-age population decline would have been more than twice as steep without immigration. Thanks to the influx of foreign workers, the demographic dividend—an indicator of economic growth potential—dropped by only 4.6 percentage points instead of a projected 7.8 points. This marks a roughly 60% mitigation of the negative impact of an aging population, illustrating that young migrants rejuvenate the workforce and sustain essential sectors.

From 2020 to 2024, migrant labor shifted from a neutral to a positive influence on employment, with an annual advantage of 0.22 percentage points attributable to immigration. The studies emphasize that young foreign workers are vital to maintaining businesses, social services, and social security systems in Spain.

However, the benefits of immigration are contingent on successful integration and productive participation. Challenges remain regarding migrants’ qualification recognition, employment pathways, and overcoming barriers in education and labor market access. Spain’s relatively low productivity levels mean that fostering migrant integration and improving productivity are essential for long-term economic gains.

Supporting this approach, the Spanish government recently approved a mass regularization process for irregular migrants, estimated to impact between 500,000 and possibly over 800,000 individuals. This policy aims to formalize their presence in the economy, enabling them to contribute legally to public finances and economic growth.

Spain’s transformation from a country of emigration to one of significant net immigration, with arrivals up to 600,000 annually in past decades, presents an opportunity if managed well. Migrants tend to be younger, have higher labor participation rates than natives, and start families earlier, making them critical to sustaining demographic and economic vitality.

The consensus among experts is clear: while immigration alone cannot fully revert demographic aging, it substantially softens its impact. The future prosperity of Spain depends on combining continued migration with coherent policies focused on integration, education, skills recognition, and productivity improvements to harness migrant potential as a driver of sustained economic growth.