International immigration and mobility across sectors: an exploration of alternative scenarios for Spain

Abstract

This paper explores the economic effects of international immigration in Spain by constructing a CGE model. We are mainly concerned about the issue of labor mobility across sectors. In our simulations, we first restrict immigrants to work in a small set of industries receiving wages that are below the native ones, a situation that we call the short run. Then, we consider that immigrants can move freely among all the industries in the economy earning wages on a par with local workers. This we call the long run situation. The results suggest that short run economic performance can be improved by choosing strategic sectors to receive immigrants. We also find evidence that the wage regime is an important parameter to explain the impact both in the short and in the long run.