Labour Market Assimilation of Immigrants in Spain: Employment at the Expense of Bad Job-Matches?.

Abstract

Spain has traditionally been known as a country of emigrants. In the last decade, however, Spain has experienced unprecedented levels of from three areas: Latin America, Africa, and Eastern Europe. In this paper, we study the behavior of recent immigrants in the Spanish labour market, identifying the major differences compared to the native population and tracking whether these differences fade away over the years. With this objective, we focus on four labour market outcomes: labour supply, unemployment, incidence of overeducation, and incidence of temporary contracts. Results show that, compared to natives, immigrants face initially higher participation rates, higher unemployment rates, higher incidence of overeducation and higher incidence of temporary contracts. However, five years after their arrival we could broadly say that participation rates start to converge to native rates, unemployment rates decrease to levels even lower than those of natives, and the incidence of temporary contracts and overeducation remains constant: no reduction of the gap with Spanish workers is observed. Therefore, we conclude that the Spanish labour market is managing to absorb the so-called immigration boom, but at the expense of allocating immigrants in bad job-matches.