Spain | Immigration and employment

Summary

Spain is experiencing a dynamic period of strong job creation that invites optimism, but it also raises a question for debate: where does the labor force needed to sustain this growth come from without overheating the labor market?

Key points

• Key points:
• The most recent data confirm this strength. In the fourth quarter of 2025, employment increased between 0.4% quarter-over-quarter (seasonally adjusted), according to the estimate of jobs in the National Accounts, and 0.9% according to the Labor Force Survey (LFS).
• Since the end of 2019, employment among foreign nationals has risen by 51.4%, while employment among Spanish nationals has increased by 5.3%.
• In a tightening labor market, it is typical for job vacancies to rise as unemployment falls. However, since 2022, unemployment has declined by about three percentage points while the vacancy rate has remained stable. Immigration has contributed to this trend.
• A portion of the immigrant workforce is in an irregular situation. The latest BBVA Research and Fedea Observatory estimates its magnitude by comparing the employed population in the LFS with the number of workers registered and actively contributing to Social Security.
• Bringing new workers into the formal system is usually positive because it reduces the shadow economy, improves labor protection, increases tax revenue, and aligns rights and obligations. But it is a mistake to assume that success depends solely on administrative status.

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