Download Migration - Universidad Autónoma de Madrid

MIGRATION INTO
SPAIN: Areas of
Research
CMR Seminar
Warsaw – November 2007
Prof. Ramón Mahía – Rafael de Arce
Applied Economics Department
www.uam.es/ramon.mahia
Introduction
Applied Economy Department (Universidad Autónoma of Madrid)
www.uam.es/ramon.mahia
www.uam.es/rafael.dearce

Teaching areas:
Econometrics (UAM)
 Multivariate Analysis (SPSS Consultants)
 Simulation models for International Trade (Paris – Dauphine
University)


Main Research areas:
International Trade: Free Trade Scenarios Simulation,
Tarification (FEMISE Network)
 Multivariate and Econometric models for helping corporate
decision processes: forecasting, simulation .. (L.R. Klein Institute)
 NEW AREA: Migration (L.R. Klein Institute)

Structure of Presentation

SOME DATA ABOUT IMMIGRATION IN SPAIN
MAIN CAUSES OF MIGRATION FROM THE SPANISH
PERSPECTIVE

FOCUS AREAS IN SPANISH MIGRATION ECONOMICS
RESEARCH


MAIN PROJECTS ON MIGRATION OF OUR TEAM
ONE EXAMPLE: ‘2006 - Macroeconomic impact of
immigration in Madrid Region: Structure’

SPAIN AS A
CONTRY OF
IMMIGRATION
SOME DATA
Spain was, for decades, a net sending country of
migrants and, in just few years, has become the
preferred European destination country.

FOREIGN RESIDENT POPULATION
% OF TOTAL POPULATION
12
10
8
3.00
2.50
2.00
1.50
1.00
0.50
6
4
2
0.00
0
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
%
Milllions
5.00
4.50
4.00
3.50
SPAIN AS A
CONTRY OF
IMMIGRATION
SOME DATA
According to UN 2006 report, Spain was one of
the main three world migration receiving
countries for the period 1990 and 2005 (+ EEUU
and Germany).
 In 2005 and 2006, Spain was the main receiving
country of ‘economic’ migrants of the 30 OECD
countries as % of the total population.
 During 2004, 2005 & 2006, 1 out of 3 immigrants
entering EU came into Spain.
 The
% of migrant population (10%) is the
second highest of Europe and the fourth of the
World; this % is well above 10% in some regions,
for example in Madrid Region.

SPAIN AS A
CONTRY OF
IMMIGRATION
CAUSES OF IMMIGRATION
(1) Demographical trend (aging structure)

Native Population by Age
Aged 16-24
45
40
Aged 25-54
Out of 16-54 years
100 %
100 %
35
16,8 %
17,7 %
25
22.5 %
20
15
21.9 %
16,0 %
17,6 %
10
5.8 %
5
3.9%
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
0
1996
Milllions
30
SPAIN AS A
CONTRY OF
IMMIGRATION
Demographical trend (educational structure)
Low skilled population over total
% of Low skilled TOTAL population
% of Low skilled WOMEN population
0,6
0,5
0,5
0,4
0,4
0,3
0,3
0,2
2007QI
2006QI
2005QI
2004QI
2003QI
2002QI
2001QI
0,2
2000QI
Milllions

CAUSES OF MIGRATION
SPAIN AS A
CONTRY OF
IMMIGRATION
CAUSES OF MIGRATION
(2) Sustained economic growth WITH HUGE
EMPLOYMENT creation:

The Real GDP Growth 2001-2007 average was 3.4% (the
second higher among EU-12 countries) AND/BUT…..
….. the main sources of GDP growth (65%) were/are
Building and Services sectors activities…..
…. this sectors show a heavy share of Labour over
Production so….
...
during 2001-2007, nearly 4.7 millions of new
employments were created: 40% of EU-12 ..

SPAIN AS A
CONTRY OF
IMMIGRATION
CAUSES OF MIGRATION
1996-2000
12%
9%
8%
1%
20%
7%
43%
Agricultura, ganadería y pesca
Industria
- Servicios de mercado
Impuestos netos sobre los productos
Energía
Construcción
- Servicios de no mercado
2001-2005
14%
2% 2%
4%
15%
13%
50%
SPAIN AS A
CONTRY OF
IMMIGRATION
CAUSES OF MIGRATION
… 4,7 millions of employments created without any
substantial reduction of unemployment rate and no
substantial rise in activity rate: NATIVE ACTIVE
population only increased 1,3 million… so…..
….2,5 million of immigrant employments were
created (2,2 coming from Non-DC)
 That means that 1 out of 2 new employments in
Spain were taken by immigrants in 2001-2007
 Nowadays, around 15% of total employment is
migrant employment.
This average varies strongly depending on region
(can reach 20%) and labor market sector (can reach
40%).

SPAIN AS A
CONTRY OF
IMMIGRATION

CAUSES OF MIGRATION
(3) Immigration policy design and evolution:
Easy to enter as a “legal” resident or worker: Residence and
working permissions works in a similar way that in the rest of
Europe with any remarkable restrictions.
 Easy to enter illegally: Exhaustive frontiers control doesn’t
exist. (no means, ¿no real interest?)
 Easy to live and work been illegal:
 Been illegal is not a penal crime but an administrative fault,
it is very unlikely to be arrested and almost impossible to be
deported.
 Public health and public education does not require legal
status.
 Working without any kind of contract still been common,
even for Spanish people (25% of informal economy)
 Easy to become legal once you are in Spain: There are
regular ways of become legal after several years and, to some
extent, there exists the thought that an amnesty process can arise
(process is perceived 3 processes in the last 5 years.

MIGRATION
INTO SPAIN:
Areas of
Research
MAIN SPANISH MIGRATION ECONOMY RELATED
RESEARCH AREAS
Evolution / Perspectives of Migration IN-Flows: future scenarios
for Spanish “pull” factors and international “push” factors, Spanish /
European migration policy role, international cooperation,..
 Demographical challenges and im-migration
 Immigration and Labor Market:
 Participation
(description,
insertion
/
exclusion,
segmentation,….)
 (**) Interaction with native labor market: unemployment, wages
(Dual Market Vs Assimilation Vs “Damage”)
 Immigration and economic growth:
 (**) Macro Economic Impact: growth, welfare looses and gains,
productivity, competitiveness
 Micro Economic issues: Patterns of consumption, investment,
savings, remittances
Public sector implications: Fiscal balance (migration “costs” and
revenues), pension system sustainability

MIGRATION
INTO SPAIN:
Areas of
Research
MAIN PROJECTS ON MIGRATION OF OUR TEAM
6th- European FP (2005-2008): Go-EUROMED, “An analysis of demographic
changes in the euro Mediterranean region and migration movements in the EU”
 European Commission FEMISE Project (2007-2008): “A dynamic long and
short term approach to migration between MP’s and EU: demographical
framework and the role of economic and social reforms”
 Madrid City Hall Government Agency (2005): Municipal Survey on Migration
Consumption Patterns
 Madrid Regional Government Agency (2006): “Macroeconomic impact of
immigration in Madrid Region”
 Spanish R+D Framework Program (2005): “Female immigration contribution to
Spanish economic growth”
 Madrid
Regional Government Agency (2007): “Survey on patterns of
consumption, investment, savings, and remittances of migrants households in
Madrid Region”
 Spanish Economic and Social Council (2007-2008): “Migration implications in
the long term scenarios for pension system sustainability and migration”.

MIGRATION
INTO SPAIN:
Areas of
Research

MIGRATION SITUATION DESCRIPTION AND DELPHI SURVEY


2006 - Macroeconomic impact of immigration in
Madrid Region: Structure
Ramón Mahía – UAM
MIGRATION IMPACT ON LABOR MARKET
WAGES: Ramón Mahía – UAM / José Vicéns – UAM
 EMPLOYMENT: Eva Medina – UAM / Ainhoa Herrate - UAM


MIGRATION IMPACT IN VALUE ADDED AND TOTAL EMPLOYMENT



Rafael de Arce – UAM
MIGRATION REMITTANCES ESTIMATION
Pedro Chasco – UAM / Invención Hernández – UAM
BUDGETARY IMPACT OF MIGRATION
MIGRATION RELATED COSTS: Sofía García / Álvaro Salas – UAM
 HEALTH SYSTEM COSTS: Rafael Díaz-Regañón – SESCAM
/ Eva Medina – UAM
 EDUCATION SYSTEMS COSTS: Carmen Pérez - UAM

2006 - Macroeconomic impact of immigration in
Madrid Region: Main scheme
Hypothesis on illegal
migration flows and stocks
Estimations and characterization of
illegal immigrants
Calculation and characterization of
TOTAL immigrants
Hypothesis on illegal work
of migrants
Estimations and characterization of
illegal immigrants workers
Calculation and characterization of
Total IMMIGRANT EMPLOYMENT
Hypothesis on illegal
MIGRANTS workers
SALARIES
Estimations and characterization of
illegal immigrants workers salaries
Calculation of Total IMMIGRANT
SALARIES
Total Production Effect by Branches
Direct Effect on
Production by
Branches
On
Employment
On Value
Added
On
Production
INPUT – OUTPUT GOSH
MODEL
Value added
impact by
branches
Direct Effect on
Demand by
branches
Total Demand Effect by Branches
On Value
Added
On
Employment
On
Production
INPUT – OUTPUT LEONTIEF
MODEL
Net Disposable yield
Hypothesis on savings,
remittances and
consumption basket
SECONDARY DATA SOURCES
DELPHI SURVEY ON 150 EXPERTS ON MIGRATION
MIGRATION
INTO SPAIN:
Areas of
Research
MIGRATION
INTO SPAIN:
Areas of
Research
2006 - Macroeconomic impact of immigration in
Madrid Region – Main procedures and results
No empirical evidence of relevant average impact on native wages or
unemployment in the present economic situation (excess of labor demand)
 Nearly 30% of migrant workers are irregular (no working permission
and/or no labor contract)
 Total migrant salaries account for nearly 4500 Millions euro (3.3% of
Regional GDP)
 Nearly 1800 Millions of euro (1.3% of Regional GDP) are perceived by
irregular immigrant workers
 Migration workers impulse to regional real GDP growth is around 3%
cumulative in the last 5 years.
 For every 5 new migrant employments, a new native employment is
needed in a direct or indirect way.
 The firm margins obtained by the migration added value impact accounts
for 7.300 Millions euro (4,9% of Regional GDP)

MIGRATION
INTO SPAIN:
Areas of
Research

2006 - Macroeconomic impact of immigration in
Madrid Region: I-O Models Empirical Notes
Advantages:
Global estimation of direct and indirect effects taking into account the
interlinks between sectors in the economy
 Wide range comprehension of economic impact chain: (employment, salaries,
value added,
production, savings, remittances, consumption, Branches,
productivities,…) .
 Results obtained by branches / sectors
 Put out different components of effects (production effect and induced
demand effect)


Limitations:
 I-O technical frame needed: lack of updating and, sometimes, low quality
 Coherent design of scenarios for a wide range of economic variables
 High sensibility in calibration of critical coefficients: inverse of productivity
ratio, Margins over Valued Added ratio, external-domestic production, ….
MIGRATION INTO
SPAIN: Areas of
Research
CMR Seminar
Warsaw – November 2007
Prof. Ramón Mahía – Rafael de Arce
Applied Economics Department
www.uam.es/ramon.mahia