Spain | Regional convergence: from progress to stagnation

Summary

Regional convergence in per capita income in Spain had advanced for decades but stalled since the Global Financial Crisis. The halt in productivity convergence and its growing correlation with employment and participation explain the persistence of territorial inequalities.

Key points

• Key points:
• Following a process of regional convergence between 1980 and the late 1990s, differences in per capita GDP across autonomous regions stopped narrowing and have remained largely stagnant since the Global Financial Crisis.
• Productivity is the main driver of regional disparities: it accounts for nearly 48% of the variance in per capita GDP, and its convergence has come to a halt since the early 2000s.
• Correlations between productivity, employment, and labor force participation have changed markedly: today, the most productive regions are also those with the highest employment and participation rates, reinforcing income gaps rather than offsetting them.
• Resuming convergence requires simultaneous progress in productivity, effective labor market policies, and the attraction of human capital, shifting the focus from ex post redistribution toward the creation of productive capabilities and real opportunities.

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