Eurozone crisis: will Spain's youth exodus weaken economy?

Young Spanish professionals are increasingly relocating to different countries as their economic prospects worsen and unemployment shows no sign of letting up in the near future.

More than a decade of robust Spanish growth ended in 2008 as a construction boom went bust, and the global economic crisis further undermined the economy, leaving millions without a job.

But what this means to Spain's long-term future is not certain. Some emphasize the benefits of an internationally experienced generation upon their return, while others stress that their exit is depriving Spain of its most promising workers.

“We’re leaving because of the crisis, but the experience we’ll get in the US is more rewarding,” said German Coppola, a 37-year-old who in September is slated to move to Texas with his wife and three small children, after deciding to take a job in a technology company rather than taking a risk in Spain by continuing his own business.

“I got a good job offer doing what I do,” Mr. Coppola said. “On the other hand, the Spanish market is not fit for small companies in the technology sector. And most of our clients don’t have money to invest, and if they do, they don’t know what to invest it in.”

The Spanish National Statistics Institute released preliminary data for the first half of 2012 last week, showing a rising exodus of Spaniards since 2009.

From 2009 to 2010, the number of Spaniards that moved to other countries increased by 5 percent, while in 2011 the percentage increase soared to 70 percent. In the first half of 2012, the number climbed almost 45 percent compared to the same period last year.

The number of departures, which in 2011 tallied almost 62,500 Spanish-born citizens, should not be taken at face value. It is difficult to track migratory movements, especially within a borderless European Union. But the trend is indisputable. 

Brain drain?

When the official statistics came out last week, Spanish media, many politicians, and columnists took a pessimistic view and warned of a brain drain that would deny Spain its most promising engineers, doctors, scientists, and similar professions in the future.

Of those who left in 2011, one-third were aged between 22 and 35 years old. The data suggest that most moved to a country within Europe, and to a lesser degree to Latin America and the US. The number of Spanish citizens that left in the first half of 2012 increased by 45 percent.

In 2011, out of a half-million people who emigrated to other countries only 12 percent were Spanish-born. The rest were foreign immigrants going back home, mostly from the European Union, Northern Africa, and South America. 

Out of proportion 

But many experts warn that the issue is being blown out of proportion. There’s little that can be done to reverse the trend with Spain’s current dire economic forecasts. Moreover, experts warn many more will leave, an expected consequence of high unemployment, especially among those under 35 years old, half of whom are without a job. 

“I think [calling it a] brain drain is an exaggeration. It’s more like a loss of human capital, and very limited at that,” says Joaquín Arango, a migration expert at the Group of Population and Society Studies, a Spanish think tank, and a sociology professor at the Universidad Complutense de Madrid. “These are just estimates. Quantifying departures is very hard and carries a huge error margin.”

“It’s significant, though,” he adds, “because it shows a trend. This crisis is very serious and it’s especially affecting the young, so it’s normal that they would seek other opportunities, among other reasons because they are mobile and have little to look forward to here.”

In the short term, migration will be good, some analysts argue, as most youths are unemployed anyway and thus the Spanish unemployment rate should fall, albeit moderately. Furthermore, it is likely to create an internationally experienced generation of Spanish-educated professionals, most of whom will return when the economy turns around.

Brain 'train'

“I’d say this is more of a brain train, than a brain drain,” says Gayle Allard, an economics professor at Spain’s IE Business School. “As long as they come back, and knowing Spain, they probably will, I don’t think it’s a tragedy. It’s the push that these young [people] need to find the skills that Spain wants.” 

“I tend to think in a country as closed as Spain traditionally is, where people stay home, this is going to be a plus. They’ll come back with experience and more languages,” Ms. Allard adds.

Mr. Coppola is planning to come back, but not before Spain’s economy improves.

“I don’t think there’s anything the government can do to fix this, not for another three or four years,” he says. “We’ll come back then, but I’ll have the experience of working in the US.”

Spain’s economy could take a lot longer than that to recover, after which luring all that talent will be increasingly difficult, points out Dr. Arango.

“As long as this crisis continues, the departure trend will not change,” he says. “We’ll have a problem if this becomes chronic and people don’t return. But right now, with the economy in this shape, there are other priorities.”