Labour productivity in Spain: 1977–2002

This study examines the evolution of labour productivity across Spanish regions during the period from 1977 to 2002. Applying the kernel technique, we estimate the effects of the transition process on labour productivity and its main sources. We find that Spanish regions experienced a major convergence process in labour productivity mostly driven by human capital in the 1977–1993 period. Conversely, the dynamics of investment in physical capital appear to be neutral with respect to the transition dynamics of labour productivity. Finally, from 1995 to 2002, no dynamic processes seemed to have taken place. Spanish regions exhibit a persistent relative position with established convergence clubs: the human capital effect is less important and the investment in physical capital seems not to have a triggering effect on labour productivity growth.