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Effects of the Great Recession on Immigrants’ Household Consumption in Spain

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Abstract

The massive influx of immigrants has played an essential role in the high growth of the Spanish economy during the period 1997–2007. The severe economic crisis that began in 2008 is characterized by high unemployment and reductions in consumption by households. This article uses the Household Budget Survey to empirically estimate changes in the consumption patterns of households as a result of the economic crisis, analyzing whether differential impacts exist according to the nationality of the household’s main breadwinner. Our results show that households with non-Spanish main breadwinners have lower levels of pre-crisis consumption, greater decrease in consumption because of the crisis and greater inequality in consumption levels.

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Notes

  1. A discussion on the relevant theories is found in Massey et al. (1993), Arango (2003) and Bijak (2011).

  2. It is noteworthy the large importance of illegal immigration, which reached a maximum of 47 % of the foreign population in 2005. The Spanish labour market, with a high importance of the shadow economy, and the inefficient application of immigration laws can explain this phenomenon (Laparra 2011; Mahía 2010).

  3. All data in this section come from the INE (Spanish National Accounts, Quarterly Spanish National Accounts and Economically Active Population Survey), that shows information about the nationality of the person, but not of the place where he/she was born.

  4. A different view is suggested by Cantó (2013), who concludes that the Spanish system of benefits and taxes has seen an increase in its capacity of redistribution between 2005 and 2011, due to increases in income tax and the emergence of an unemployment allowance for the long-term unemployed (Programa Prepara).

  5. Arranz and García-Serrano (2013) find that there is a positive wage differential for European immigrants, which has increased since the beginning of the crisis.

  6. A review of the different empirical approaches to estimate how consumption responds to changes in income can be found in Jappelli and Pisaferri (2010). A comprehensive discussion of theoretical and empirical issues regarding consumption using household survey data can be found in Deaton (1997).

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Acknowledgments

The authors would like to thank Anna Payret and Mireia Puig for their excellent research assistance. We also wish to thank the participants at the 4th Congress of the Red Española de Política Social (REPS), held on 6–7 June 2013 in Alcalá de Henares (Madrid), for their valuable comments.

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Authors and Affiliations

  1. Departament d’Economia, Facultat de Ciències Econòmiques i Empresarials, Universitat de Girona, Campus Montilivi, 17071, Girona, Catalonia, Spain

    Ramon Ballester & Ricard Rigall-I-Torrent

  2. Departamento de Economía, Pontificia Universidad Católica del Perú, Av. Universitaria No 1801, San Miguel, Lima, Peru

    Jackeline Velazco

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  1. Ramon Ballester
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  2. Jackeline Velazco
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Correspondence to Ramon Ballester.

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Ballester, R., Velazco, J. & Rigall-I-Torrent, R. Effects of the Great Recession on Immigrants’ Household Consumption in Spain. Soc Indic Res 123, 771–797 (2015). https://doi.org/10.1007/s11205-014-0760-1

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