Spain is one of the European countries where immigration flows during the last decade have increased most noticeably. Spanish labor market institutions and Spanish immigration policy exhibit some peculiarities which may be relevant when analyzing the impact of immigration. This paper provides a first approximation to the labor market effects of immigrants in Spain during the second half of the 1990s, the period in which immigration flows to Spain accelerated.

By using alternative datasets, we estimate both the impact of legal and total immigration flows on the employment rates of native workers, with and without the implications of the occupational and geographical mobility of immigrants and native-born workers. Using different samples and estimation procedures, we have not found a significant negative effect of immigration on the employment rates of native workers. The corresponding estimated elasticity is around –0.17, when considering only legal immigrants, and is not significant when considering both legal and illegal immigrants.