Introduction

The integration of foreign workers into the labour market is essential for promoting social cohesion and reducing economic inequalities. Employment is a critical factor in the integration process, providing financial stability and fostering social inclusion. In this study, Integration of Foreign Workers into the Spanish Labor Market, the authors analyse the current state of labour market integration for foreign-born individuals in Spain. The report employs a detailed quantitative analysis, examining more than 60 indicators to compare the labour market conditions of native and foreign workers. This includes data on activity rates, employment levels, working conditions, unemployment rates, and salaries. The analysis also incorporates a gender perspective to highlight additional challenges faced by foreign women in the labour market.

Main Findings

The report reveals significant disparities in the labour market integration of foreign workers in Spain:

• Population and activity rates: The foreign-born population in Spain is approximately 6.7 million people, representing 14.3% of the total population. More than half of these individuals have resided in Spain for over 13 years. Despite this, the labour force participation rate for foreigners is higher than that of natives, with 78% of the foreign-born population being of working age compared to 63% of the native population. However, this higher activity rate does not necessarily indicate better integration, as it often reflects early entry into the labour market and premature exit from the education system.
• Employment rates: Foreign workers account for 3.2 million individuals, or 16% of the labour force, with an overall employment rate of 57%, compared to 51% for native Spaniards. Despite this, the employment rate for foreigners is lower in most age groups, indicating a lack of full integration. Foreign women, in particular, face significant challenges, with an employment rate of 65% compared to 71% for foreign men.
• Working conditions: The working conditions for foreign workers are generally poorer than those for native workers. Temporary contracts are more common among foreigners (36%) compared to Spaniards (23.4%). Additionally, 8% of foreign workers have “verbal” contracts, suggesting irregular employment, compared to 1.7% of Spaniards. Part-time work is also more prevalent among foreigners (17.6%) than natives (13%).
• Unemployment rates: The unemployment rate among the foreign population is 19.7%, significantly higher than the 12% rate for Spaniards. This disparity is even more pronounced in certain age groups, with foreign workers experiencing higher unemployment rates across all age cohorts. The lower registration rate at job centres among foreign unemployed individuals (28%) compared to Spaniards (10%) further highlights the integration challenges.
• Gender disparities: Foreign women face a double disadvantage in the labour market. They are more likely to have temporary contracts (35% compared to 26% for Spanish women) and “verbal” contracts (12% compared to 2.2% for Spanish women). Part-time employment is also significantly higher among foreign women (30%) compared to their male counterparts and Spanish women.
• Educational attainment and employment: The employment rate for foreigners with secondary education and higher is significantly lower than that of natives, indicating a lack of integration. Foreign workers are more likely to be employed in low-skilled jobs, and those with higher education face higher unemployment rates (11-19%) compared to their Spanish counterparts (4-5%).

Conclusions and policy recommendations

The findings indicate that foreign workers in Spain face substantial barriers to full labour market integration. Despite their higher activity rates, foreign workers experience lower employment rates, poorer working conditions, and higher unemployment rates than native Spaniards. These challenges are exacerbated for foreign women, who face additional disadvantages in terms of job quality and employment stability. To address these issues, the report recommends several policy measures. Enhanced support for job training and education is essential to improving the employability of foreign workers. Policies should also focus on reducing the prevalence of temporary and irregular contracts among foreign workers. Additionally, targeted support for foreign women, including measures to promote gender equality in the labour market, is crucial. By implementing these recommendations, Spain can create a more inclusive and equitable labour market, ultimately promoting social cohesion and reducing economic inequalities.