The Spanish catching-up process: General determinants and contribution of the manufacturing industry
Series: Working Papers. 9428.
Author: Juan Maria Peñalosa.
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Abstract
This paper is devoted to the analysis of the real convergence process between Spain and the EC and the contribution to this process made by the manufacturing industry. The first part places emphasis on the peculiar higher convergence recorded by the Spanish economy in terms of wages and productivity per worker than in terms of income per capita. The very low proportion of employment to population is regarded as the main factor leading to that situation. The available data also point to a clear relationship of both higher employment and lower wages per employee to higher relative income per capita.
The concept of industrial catching-up is introduced and analyzed taking into account the productivity and employment performance in this sector. The poor results recorded in terms of industrial catching-up in Spain highlight the temporary nature of the improvement in the overall real convergence process experienced after the accession to the EC, as this was mainly supported by the expansion of the service sector and coincided with a period of worsening in Spanish competitiveness. The evolution of industrial output shows a certain relationship to the performance of the external balance, which stresses the need to preserve industrial competitiveness in order to prevent the deterioration of the external sector and to make the catching-up process endure.