Published on Monday, August 2, 2021

Spain | The (incomplete) regional convergence

Despite the significant improvement in per capita income in Spain over the last few decades and the considerable resources the public sector has dedicated in trying to reduce the differences between the country's regions, the result in terms of regional convergence is not completely satisfactory.

Key points

  • Key points:
  • The gap between regional incomes, in relation to average income, has been cut by 44%, from 0.36 in 1960 to 0.20 in 2019. However, the convergence process, which was pretty intense in the first three decades, has practically ground to a halt in the last three, except for a slight advance just before the Great Recession.
  • Since human capital is a basic determinant of labor productivity, of the unemployment rate and as a result, of the GDP per working-age person, in a recent BBVA Research and FEDEA study we analyzed the trend in regional educational disparities throughout this period, using updated time series of the number of years of education of people over 25.
  • Although these inequalities have been substantially reduced in the last 60 years, they have done so at an uneven rate. It is not surprising to find that during these six decades the communities at the extremes of the regional distribution of years of schooling are the same as for GDP per working-age person.
  • Nonetheless, the considerable improvement in the level of training has translated into an increase of almost 120% in the average number of years of education of the adult population — up from 4.7 in 1960 to 10.4 in 2019.
  • Understanding the causes of these regional differences, and why the convergence process has come to a stop, is a necessary prior condition for identifying the problems that need to be overcome and taking the right measures to ensure that it happens.

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