Spain’s New Immigration Reforms: a Great European Experiment

Spain is going against the grain of European migration policy by liberalising its migration rules. But can mass regularisation defuse its demographic timebomb?

Zain Ali | 26 November 2024

During 2024, an increasingly anti-immigration mood has settled over Europe. Germany, France and the Netherlands have already broken with the Schengen consensus and imposed land border controls to stem the flow of illegal immigrants. Parties of the far-right are triumphing in elections all over the continent, with some even calling for forced ‘remigration’ of Europe’s foreign-born residents.

But one country is bucking the trend.

Spain has recently unveiled its most comprehensive package of immigration reforms in 13 years. Approved by the Council of Ministers in November 2024, the reforms seek to regularise the legal status of approximately 300,000 illegal immigrants annually until 2027.

This decisive shift in Spain’s workforce strategy stands in huge contrast with its neighbours’ reductionist policy objectives.

Spanish Immigration Policy Changes

Spain has adopted the following measures in order to normalise 300,000 irregular migrants per year:

Reduction in residency qualification period from three to two years for irregular migrants
Introduction of five integration pathways: social, socio-training, socio-occupational, family, and second chance
Extension of student work rights to 30 hours weekly with simplified transition to work permits
Creation of specific residence and work permits for seasonal activities
Expansion of family reunification age limit to 26 years for children (previously 21)
Implementation of fast-track pathways from study to work permits
Enhanced protections for victims of trafficking and gender-based violence
Streamlined procedures for relatives of Spanish citizens

The Rationale Behind Spain’s Immigration Reforms

The reform package is a direct response to Spain’s pressing demographic and economic challenges.

Around 14.1 million baby boomers are projected to retire from the workforce in the next few decades. This is the Gordian knot that so many of the world’s developed countries are dealing with. An ageing, fast-retiring population blows a hole in the workforce while ratcheting up pressure on health and care services. Businesses that can’t fill their vacancies won’t be able to generate the growth needed to fund enlarged public services. If not fixed, this demographic trend will make Europe’s social market model untenable.

The Spanish economy is already chafing against labour shortages in critical areas like tech, healthcare, hospitality, construction and transport. With discrimination against foreigners estimated to cost the economy €17 billion annually (1.3% of GDP), the Spanish government sees immigration as a crucial lever for economic growth.

Currently, 2.9 million foreign residents contribute to Spain’s Social Security system, representing 13.6% of all contributors. Spain’s Central Bank estimates that the country will need approximately 25 million immigrants over the next three decades to maintain current levels of economic growth and support its pension system.

The government hopes that streamlining work permit processes and creating pathways for seasonal workers will form the sustainable workforce that tides the country through its demographic challenges.

The Choice – Automation or Migration

To lead is to choose, and the stark reality of Spain’s low birth rate has forced policymakers to pick between two paths. The first is the Japanese model of compensating for low levels of immigration and a declining population by betting on automation and technology to replace human productive capacity. The other is to follow the lead of the UK or Australia and use immigration to replenish a declining workforce. Spain has chosen the latter path.

By regularising illegal migrants’ status and allowing them to join the workforce, the policies should alleviate acute labour shortages and give migrants in menial roles a chance to develop higher-value skills.

The Path to Implementation

This ambitious package will not be easy to implement. The Spanish state will have to build the administrative capacity to process a huge volume of increased applications. In a decentralised constitutional system, central government will then have to co-ordinate rules and resources with the Autonomous Communities.

The reforms’ success hinges on whether these irregular immigrants can be successfully socially integrated and accepted by the public. Current polling shows that 41% of Spaniards express significant concern about immigration, with only 9% associating immigrants with economic advancement.

To address these concerns, the reform package includes robust integration measures. Language training and cultural orientation programs will be rolled out at scale alongside new professional development opportunities.

Success will require sustained political will, adequate resource allocation, and effective coordination between government agencies, employers, and civil society organisations. The government has committed to regularly evaluate and assess the policies based on outcomes and feedback from stakeholders. This suggests that target numbers may be tweaked and refined over the policy’s lifecycle.

What this Means for Global Mobility Professionals

The Spanish formal labour pool is about to grow by almost a million by 2027. Global Mobility and Talent Acquisition teams will have a busy three years ahead of them.

The regularisation drive will likely create a wave of demand for assistance with bureaucratic procedures. Previously undocumented migrants without official job histories will need to be onboarded compliantly and have their documentation verified.

Simplified work permits and work allowances for students will make hiring foreign nationals much more straightforward in Spain.

Mobility professionals can offer strategic advice to companies on which roles newly normalised migrant workers could best fill. Compliance specialists, recruiters and legal teams will become even more integral partners for businesses with a presence in Spain.

The Spanish Gambit – and How to Tap Into It

In a Europe that’s falling out of love with free movement, Spain’s immigration reforms are a bold bet on the positive economic and social impacts of managed migration.

Spain’s policy divergence has effectively kicked off a live A/B test for immigration policies. Prime Minister Pedro Sánchez has explicitly framed it as such, describing his government as making a choice between being “an open, prosperous country or being a closed and poor one”. If the Spanish gambit pays off and generates higher sustained growth than its restrictionist neighbours without undermining social harmony, policymakers will have a clearer empirical basis for choosing pro-migration agendas.

As other nations watch Spain’s experiment, the outcomes of these reforms could shape the future of European immigration policy. But whichever way events unfold on a macro level, Global Mobility professionals on the Iberian peninsula have their work cut out for them in the short term.