Regularizing immigrants works

The Council of Ministers has approved the reform of the immigration regulations, which will allow immigrants living and working in Spain without legal status to regularize their immigration status. This is good news, not only for the dignity of those directly affected, but also for society as a whole. According to recent estimates of FuncasMore than 800,000 immigrants who are already part of the country's economic and social fabric could benefit from this policy.

Successive Spanish governments have repeatedly resorted to extraordinary regularization programs as a migration policy tool. The most recent and significant occurred in 2005 during José Luis Rodríguez Zapatero's first term, when nearly 600,000 people obtained work and residence permits. That process generated intense debate, often dominated by alarmist arguments. However, twenty years later, it offers a valuable opportunity to analyze its effects with perspective and empirical evidence.

Every time regularization is discussed, the same questions resurface: Will it create a pull factor? Will it affect employment, wages, or public finances? In the Spanish case, we are not starting from scratch. We have solid evidence to answer these questions.

In a recent study, prepared by Ferran Elias, Joan Monràs and myself and published last year in Journal of Labour EconomicsWe analyzed the effects of the 2005 regularization program up to the arrival of the international financial crisis in 2008, comparing territories and groups with varying degrees of exposure to the measure. Although that regularization program is not identical to the current one, partly because the 2005 program was linked to an employment contract, the results are clear and fully relevant to the current debate.

The main results can be summarized in five points.

First, the regularization had no effect on immigration flows to Spain. Analyzing the evolution of immigrant flows from the countries affected and unaffected by the policy, before and after the regularization, we clearly rule out a pull factor. In other words, the evolution of migration flows was the same in both groups of countries.

Secondly, formal employment increased significantly: many immigrants who had been working in the informal economy were able to access legal contracts. Although not all immigrants who were granted legal status remained permanently in the formal sector, the policy did noticeably improve their job opportunities, fostering greater mobility, both sectorally and regionally, access to larger companies and sectors with less informality, and ultimately, better career paths for the immigrants affected by the measure.

Third, and contrary to one of the most widespread arguments, the formal wages of native workers did not decrease. On the contrary, evidence shows that they increased, especially among the most skilled workers. Regularization reduced the bargaining power of companies that profited from the vulnerability of workers with irregular immigration status, contributing to a more competitive and transparent labor market.

Fourth, regularization resulted in job losses among both native-born and immigrant workers in the informal sector, particularly among the least skilled. This outcome is closely linked to the increased labor inspections and efforts to reduce informality implemented alongside regularization, highlighting that some informal employment exists due to a lack of effective controls by public institutions. Therefore, regularization programs should be accompanied by proactive policies that facilitate the transition to formal employment.

Finally, the impact on public finances was clearly positive. Each legalized immigrant generated approximately €4,000 annually in social security contributions and around €500 through income tax. However, no significant increase in spending on healthcare or education was observed, services to which these individuals already had access before legalization.

In the current context of demographic aging, labor shortages, and increasing pressure on the welfare state, this evidence is especially relevant. Reforming immigration regulations is not only a measure of social justice; it is also an economically sound decision. Regularization is not the problem; it is part of the solution.