The Process of Structural Change in the Spanish Economy from a Historical Standpoint

Abstract

Historical experience and the economic literature show that the process of structural change of economies towards more advanced stages of development is associated with a particular pattern of change in the sectoral composition of economic activity. In a first stage, the manufacturing share increases while agriculture’s share decreases. In a second stage, the manufacturing share starts to decline and the services share starts to grow. This paper presents a brief overview of the empirical evidence available on this process of structural change at an international level, highlighting the case of the Spanish economy. As a result of the rapid process of structural change over the last four decades, the productive structure of the Spanish economy has converged towards that of the European countries, with higher shares for services and manufacturing and a lower share for agriculture. Beyond the impact of cyclical fluctuations, we can expect increases in the services share, at the expense of manufacturing and agriculture. According to the literature, these patterns may be related to demand forces (the public’s preferences), supply forces (different sectoral productivity patterns) or a combination of both, owing to openness to international trade which can accelerate the process. Therefore, an in-depth analysis of the causes of structural change in Spain is essential, inasmuch as the future development of this process will determine economic growth in the long run.

Note: Downloadable document is in Spanish.

Keywords: structural change, economic sectors, sectorial analysis, Spanish economy

JEL Classification: O11, O14, O4