The size, socio-economic composition and fiscal implications of the irregular immigration in Spain

Abstract

This paper estimates the total number of irregular immigrants residing in Spain from 2002 to2019 and studies their nationality, sex, gender and sectoral composition. Using the residualmethod and combining microdata sources from the Spanish Labour Force Survey and SocialSecurity registers I find that by the end of 2019 there was around 390,000-470,000 irregularimmigrants in Spain, which account for 11-13% of the total non-EU immigrants. Irregularimmigrants are younger than the regular ones, they are predominantly from South and CentralAmerica and they are concentrated in the accommodation and food activities and the activitieshousehold sector. Using the most updated wave of the EU-SILC data for Spain, I find a positivedirect fiscal impact of the non-EU immigration. This impact is 75% higher than for the natives'households, mainly explained by their younger age structure. Once education and health publicsystems are taken into account, the fiscal impact gap between the two type of householdsvanishes. I also find large fiscal costs associated to maintaining the irregularity status. Last,my estimates suggest that the potential positive gains from legalising the current status of theirregular immigrants are around 3,300 euros yearly by regularized worker.