The Long-Term Patterns of Regional Income Inequality in Spain, 1860–2000

Abstract

Martínez-Galarraga J., Rosés J. R. and Tirado D. A. The long-term patterns of regional income inequality in Spain, 1860–2000, Regional Studies. Building on a new estimation of regional gross domestic product (GDP) from 1860 to 2000, this paper evaluates the long-run evolution of regional income inequality in Spain. It is found that sustained economic growth and the progressive integration of national markets have been accompanied by an inverted ‘U’-shaped evolution of regional income inequality. Regional inequality in income per worker rose during the second half of the nineteenth century, peaked in the year 1900 and decreased over the following ninety years. Since 1990, together with the exhaustion of the convergence in regional productive structures, Spain's membership in the European Union generated a new upsurge of differences in labour productivity across the country that could be the basis for a new phase of regional income divergence.

Martínez-Galarraga J., Rosés J. R. and Tirado D. A. 西班牙长期的区域所得不均形态，1860—2000 年，区域研究。本文奠基于对 1860 年至 2000 年区域国内生产总值 (GDP) 的新评估之上，评价西班牙区域所得不均的长期发展。研究发 现，伴随可持续经济成长及逐渐整合的国内市场而来的是区域所得不均的“U”型发展。人均所得的区域不均，在十九世纪后半叶期间开始攀升，于 1900 年达到顶峰后，并在其后的九十年间逐渐下降。自 1990 年来，随着区域生产结构汇聚的耗尽， 西班牙在欧盟的会员身份，导致了国内劳动生产力差异的新高，并可能成为新一阶段区域所得分歧的基础。

Martínez-Galarraga J., Rosés J. R. et Tirado D. A. La structure à long terme des inégalités de revenus régionales en Espagne, de 1860 jusqu'à l'an 2000, Regional Studies. Tablant sur une nouvelle estimation du Produit intérieur brut (Pib) régional de 1860 jusqu'à l'an 2000, ce présent article évalue l'évolution à long terme des inégalités de revenus régionales en Espagne. Il s'avère que la croissance économique durable et l'intégration progressive des marchés nationaux ont été accompagnées d'une évolution en ‘U’ des inégalités de revenus régionales. Les inégalités de revenus régionales par travailleur ont augmenté pendant la deuxième moitié du dix-neuvième siècle, ont atteint leur maximum en 1990 et ont diminué au cours des prochains quatre-vingt-dix ans. Depuis 1990, conjointement avec l'épuisement de la convergence des structures productives régionales, l'adhésion de l'Espagne à l'Union européenne a entraîné à travers le pays une recrudescence des différences au chapitre de la productivité du travail, ce qui pourrait servir de base pour une nouvelle phase de disparités entre les revenus régionaux.

Martínez-Galarraga J., Rosés J. R. und Tirado D. A. Langfristige Abläufe beim regionalen Einkommensungleichgewicht in Spanien, 1860–2000, Regional Studies. Aufbauend auf einer neuen Schätzung des regionalen Bruttoinlandsprodukts im Zeitraum von 1860 bis 2000 bewerten wir in diesem Beitrag die langfristige Entwicklung des regionalen Einkommensungleichgewichts in Spanien. Wir stellen fest, dass ein anhaltendes Wirtschaftswachstum und die fortschreitende Integration der nationalen Märkte von einer U-förmigen Entwicklung des regionalen Einkommensungleichgewichts begleitet wurde. Das regionale Einkommensungleichgewicht pro Arbeitnehmer stieg in der zweiten Hälfte des neunzehnten Jahrhunderts an, erreichte seinen Höhepunkt im Jahr 1900 und nahm während der folgenden neunzig Jahre ab. Seit 1990 und begleitet von einer Erschöpfung der Konvergenz regionaler Produktionsstrukturen hat Spaniens Mitgliedschaft in der Europäischen Union zu einem neuen Anstieg der Unterschiede bei der Produktivität von Arbeitskräften innerhalb des Landes geführt, was die Grundlage für eine neue Phase der regionalen Einkommensdivergenz bilden könnte.

Martínez-Galarraga J., Rosés J. R. y Tirado D. A. Las tendencias de largo plazo de la desigualdad económica regional en España, 1860–2000, Regional Studies. Basándonos en una nueva estimación del producto interno bruto (PIB) de 1860 a 2000, en este artículo analizamos la evolución a largo plazo de las desigualdades de ingresos regionales en España. Observamos que el crecimiento económico sostenido y la integración progresiva de los mercados nacionales han venido acompañados de una evolución en forma de U-invertida de las desigualdades de ingresos regionales. Las desigualdades de ingresos regionales por trabajador aumentaron durante la segunda mitad del siglo XIX, llegaron a su punto álgido en el año 1900 y disminuyeron durante los siguientes noventa años. Desde 1990, junto con el agotamiento de la convergencia en las estructuras productivas regionales, la entrada de España en la Unión Europea generó un nuevo aumento de las diferencias en la productividad laboral en todo el país, lo que podría representar la base de una nueva fase de divergencia de ingresos regionales.

• Industrialization
• Market integration
• Heckscher–Ohlin model
• New Economic Geography

• 工业化
• 市场整合
• 新赫克歇尔—俄林模型
• 新经济地理学

• Industrialisation
• Intégration du marché
• Modèle Heckscher–Ohlin
• Nouvelle géographie économique

• Industrialisierung
• Marktintegration
• Heckscher–Ohlin-Modell
• Neue Wirtschaftsgeografie

• Industrialización
• Integración económica
• Modelo Heckscher–Ohlin
• Nueva Geografía Económica

JEL classifications:

• N93
• N94
• R11

Acknowledgements

Julio Martínez-Galarraga and Daniel A. Tirado acknowledge the financial support from the Ministry of Science and Innovation (Project Numbers ECO2009-13331-C02-02 and ECO2012-39169-C03-02), from the Network in Economics and Public Policies (XREPP) launched by the Generalitat de Catalunya, and from the Institut d'Economia i Empresa Antoni de Capmany. Joan R. Rosés also acknowledges support from Project Numbers ECO2009-13331-C02-01, ECO2012-39169-C03-01 and the HI-POD Project, Seventh Research Framework Programme Contract Number 225342. Previous versions of the paper were presented at the European Historical Economics Society Conference in Dublin; and the Universitat de Barcelona, Universidad Pablo de Olavide and Universitat Autònoma de Barcelona. The usual disclaimer applies.

Notes

1. The years considered by Álvarez Llano (1986) were 1802, 1849, 1860, 1901, 1921 and 1930. For a critical evaluation of these data, see Carreras (1990).

2. This evolution can be completed with Martín (1996) and Domínguez (2002). As in Carreras (1990), the analyses are both based on the GDP estimates by Álvarez Llano (1986).

3. The new dataset on historical regional GDP per capita was constructed following the methodology proposed by Geary and Stark (2002) and the refinement suggested by Crafts (2005). This methodology was recently extensively used for the estimation and analysis of the long-term patterns of regional economic inequality in some European countries such as Belgium (Buyst, 2011), Italy (Felice, 2011) and France (Combes et al., 2011).

4. Gómez Mendoza (1983) suggested that the social savings linked to the construction of the railways in Spain were significant and even higher than in other European countries. Nevertheless, Herranz (2002) revised these figures, concluding that social savings were lower than previously estimated. However, the strong reduction in transport costs that came with the railways is unambiguous.

5. There is a vast literature on the regional patterns of industrialization in Spain, including Nadal (1987, 2003), Nadal and Carreras (1990), Germán et al. (2001), Parejo (2001), Rosés (2003), and Paluzie et al. (2004).

6. Spanish GDP was drawn from Prados de la Escosura (2003).

7. It should be noted, however, that to make the discussion simpler, mining, manufacturing and construction are aggregated into industrial sector value added.

8. The source of agricultural population is the Spanish population census and the source of wages is Rosés and Sánchez-Alonso (2004).

9. The authors have taken the values of 1915 for 1910 and 1931 for 1930.

10. The authors have also corrected for errors and underreporting of original data according to Foro Hispánico de Cultura (1957).

11. Madrazo (1984) provided data for 1860, Sánchez-Alonso (1995) for 1900, Ministerio de Trabajo (1927) for 1920, and Silvestre (2003) for 1910 and 1930. However, these kinds of data are not available for the Canary Islands; it had to be assumed that their wages were equal to the lowest of the Peninsula.

12. Unfortunately for present purposes, from the year 1907 onward the information given by the EACI is not representative of industrial activities. The coverage of industrial taxes was reduced substantially in 1907 when joint stock companies, the largest Spanish industrial firms, were exempted from industrial taxes and assigned to a new corporate tax, which was based on net profits (Impuesto de Sociedades). Subsequently, many firms transformed themselves into joint stock companies because the new corporate income tax resulted in lower tax payments (Nadal and Tafunell, 1992, p. 259). By 1921, all types of partnerships paid this corporate tax and, in consequence, many firms no longer paid the industrial tax.

13. Carrión (2010) offers data comparable with that of the EACI for the Basque Country in 1860. In that year an extraordinary payment for the Basque Provinces was passed in order to give support to Spanish finances during the African War in Morocco (1859–1860). The provincial detail of the overall payments to the EACI (for both industry and commerce) allows a calculation of the stock of provincial capital on the basis of the industrial contribution paid in Guipúzcoa. As regards Navarre and the estimates for the Basque provinces in 1900, the data provided by Parejo (2001) are used. Parejo estimated the contribution of these regions to the Spanish total based on the historical indices of industrial production. This regional information was split by provinces according to their share of the active industrial workforce each year. Finally, for 1920, due to the absence of fiscal data, capital shares were interpolated using the figures for 1910 and 1930.

14. Using this source to elaborate the factor shares and then applying them in retrospect implies the assumption that the intensity in the use of factors in 1958 is a good proxy for previous years. However, it must be pointed out that this assumption has also been employed in previous estimations of the Spanish Industrial Production Indices (Carreras, 1983; Prados de la Escosura, 2003).

15. Seven industrial branches (food, textiles and footwear, metal, chemicals, paper, wood and cork, and ceramics) are considered in 1913 and 1929.

16. Because this fiscal information is not available for the Basque Country and Navarre, and because it is not possible to know their industrial structures, a labour share similar to the Spanish total is assumed for these regions. In this sense, the information gathered by Carrión (2010) for Guipúzcoa allows the factor shares for this province in 1860 to be calculated. In this case, the labour share increases slightly from 35.9% to 37.3%, resulting in an almost negligible increase in the percentage of the GVA for Guipúzcoa over the total Spanish GVA in industry.

17. Given that Herranz's (2008) database is only available from 1870 onwards, the data for 1860 were based only on urban population.

18. Underlining wages were drawn from Rosés and Sánchez-Alonso (2004).

19. However, to simplify the discussion further, NUTS-3 (provinces) were added to generate NUTS-2 (regions).

20. More specifically, the approach of Akita and Kataoka (2003) is followed.

21. These references analyse in detail the evolution of income inequality in the second half of the twentieth century. Here, the focus is mainly on the long-term trends.

22. Some studies highlight an additional factor contributing to the end of the regional convergence process: the increasing differences in the regional unemployment rates, especially in the last years. For instance, Cuadrado and Maroto (2010) suggest that immigration flows have unevenly influenced the evolution of population and employment across regions.

23. In order to check the robustness of the results of the disaggregation analysis offered in the text, an alternative procedure was also carried out: the shift–share analysis. The results confirm the main conclusions reached in the study.

24. GVA per worker in industry and region i is:

GVA_i = (w_i L_i + r_i K_i)/L_i

However, given the presence of perfect capital markets, r_i K_i/L_i should be equal across all locations. Consequently, w_i drives GVA-per-worker differences across all regions.

25. The use of a one-digit industrial classification in the calculations may conceal the greater importance of productivity in explaining regional differences in income per worker than is deserved. Regional GVA per worker in manufacturing and services activities may be different due to variations in regional industrial structures at a finer industry level.