An analysis of the convergence of Spain's regional unemployment rates: 1977--2000

Our purpose with this study is to shed some light on the problem of the real convergence between regions. To this end, we have made a triple approach, descriptive, theoretical and econometric, to the unemployment problem and the existing differences between the Spanish Autonomous Communities.; The descriptive analysis allows us to observe the growth in unemployment rates in our country, as well as the differences between the regional unemployment rates. It also shows the importance of demographic factors such as age, sex and educational level, along with others such as the composition by sector of each region, or the strength of worker's unions in each specific area. Finally, we consider how the evolution of the coefficient of variation hardly predicts increasing regional resemblance.; The theoretical approach allows us to establish the principles which serve as a foundation for the analysis of convergence. It is clear that the characteristics of the job market are a determining factor when analysing the problem of unemployment, wherefore, through a series of suppositions about labour and salary fixing, there is an effort made to elaborate a framework of scenarios that allow us to recreate the varying possibilities we may find. We are thus reminded that there will always be a certain amount of unemployment resulting from the imbalance between supply and demand, which will be worsened by another basically involuntary element, which arises in scenarios wherein salaries are established through collective negotiation, and which, in addition, do not necessarily have to be equal in all regions.; Finally, the decomposition of the variance and the techniques of co-integration are going to allow us to carry out an econometric analysis. The results of this study demonstrate the non-existence of a process of generalized convergence of the unemployment rates of the various autonomous communities, albeit we can indeed appreciate a certain degree of increasing resemblance when focusing on sufficiently homogeneous populations.