Immigration: challenges and opportunities
Between 2019 and 2023, the number of migrants in OECD countries increased by almost 30%. This is, therefore, a global phenomenon that has been particularly intense both in Catalonia and in the country as a whole: three out of every four jobs created between 2019 and 2024 were filled by people born abroad. It is estimated that 31% of the working-age population in Catalonia and 42% of those between 30 and 44 years of age were born outside of Spain, and that 40% of the child population in Catalonia (between 0 and 4 years of age) has at least one parent born abroad. We are facing a structural change that demands an informed and calm debate, comparing opinions with facts.
In addition to being global, it is also a multidimensional phenomenon, with social, cultural, linguistic, and economic consequences. From an economic perspective, immigrants have historically been accused of taking jobs away from natives and pushing down wages. These arguments are discredited: they assume that there is a fixed volume of work to be shared—which is not true—and ignore the fact that immigrants mostly tend to do the jobs that natives don't want. Currently, the most widely used economic arguments against immigration are three: first, that immigrants receive more in the form of public benefits than they contribute to state revenues; second, that they represent a brake on productivity growth; and finally, that they are responsible for the sharp rise in housing prices. Let's review them one by one.
Regarding the first argument, foreign workers are more represented in working-age groups than natives, and therefore, in their early years, they are net contributors to healthcare and pensions. In the long term, however, immigrants will also age and, consequently, make greater use of healthcare and collect the pensions they have earned. Taking these opposing effects into account, studies that have analyzed the net impact of immigration on public spending in different countries conclude that less-skilled immigrants contribute less to income than they receive in benefits over the life course, and the opposite is true for more-skilled immigrants. However, the redistributive nature of welfare states broadly implies that the 60% of the population with the lowest income are net recipients of resources, while the 40% with the highest income are net contributors. And this result would be reproduced with or without immigration, as a result of progressive taxation designed to reduce inequalities in income distribution.
Furthermore, the above argument fails to take into account other clearly positive economic effects associated with immigration. For example, the growth of the market allows for economies of scale and facilitates the specialization of those already residing in the country in higher value-added tasks and activities, with a positive impact on public revenues. That is, natives and foreigners rooted in the country move on to more productive and better-paid jobs, as a result of the economic growth made possible by a portion of the newcomers occupying the least-skilled positions. Studies that take these side effects into account offer a more positive assessment of the impact of immigration on public finances.
As for the impact of immigration on aggregate productivity, it will depend on its relative weight in sectors that are more or less intensive in human and technological capital. It's important to emphasize that immigration is increasingly important for filling highly skilled jobs, although it still predominates in less-skilled occupations. It must also be said that, if things are done right, the children of today's least-skilled immigrant workers will be tomorrow's skilled professionals. What we shouldn't accept are situations of exploitation: we must pay for the services and products we consume at their cost to ensure a decent standard of living for those who produce them, regardless of their origin. Jobs with insufficient productivity to guarantee remuneration commensurate with this minimum standard should not exist in our society.
Finally, there is sufficient international comparative evidence to conclude that increased immigration has been one of the factors driving up housing prices in many countries recently. However, this has not been the only factor, nor the most important. Poor regulation of the sector, which makes it difficult to adjust supply to growing demand, has contributed to this to a greater extent. In fact, increasing housing supply in the coming years will require covering a significant portion of the skilled labor shortage with immigration; this could raise fears of a spiral effect: we need immigrants to build, which in turn will demand more housing and necessitate even more immigration.
The spiral effect is not inevitable, but there will be a composition effect, with the increasing participation of immigrants in certain sectors of activity. And this composition effect is compatible with a stationary or moderately growing total population, through appropriate planning and regulation. Immigration is a challenge we cannot ignore, but also an opportunity to prosper collectively. To meet the challenge and seize the opportunity, we must maintain a cohesive society around shared core values, beyond economic calculations. Immigration will profoundly transform us as a country, and we must ensure that it is for the better.
