Publications

Europe’s post-pandemic economic recovery has relied significantly on immigration. Simple growth accounting exercises suggest that immigrants may have contributed around half of recent GDP growth. As the native workforce declines, immigration is becoming increasingly important to sustain economic activity.

Since the Covid-19 pandemic, immigration has become a key factor in Europe, but its impact has been uneven across countries. This report analyzes recent trends in immigration to the EU, its main features, and differences in its contribution to economic growth and employment.

GDP is estimated to have grown by 2.8% in 2025, and the expansion is expected to continue, with growth of 2.4% in both 2026 and 2027. The outlook remains favourable, although structural challenges persist in a more uncertain international environment than three months ago.

This issue of the OTMT reviews labour market developments using data available through the fourth quarter of 2025. We assess trends in the main aggregate indicators and estimate the scale and characteristics of irregular employment in Spain.

The labor market is closing 2025 with a combination of good news and structural challenges that persist. The latest data confirm a sustained expansion in employment, which does not prevent a significant gap in employment and unemployment rates from continuing to exist.

Construction happens to be one of the sectors most heavily affected by labor shortages. While higher wages and immigration are helping to bring talent into the sector, structural problems persist that require a solution.

On the first day of the Trump 2.0 administration, at least 7 executive orders or proclamations were issued regarding immigration issues, highlighting the importance of this issue for his government.