Productivity Growth

This chapter assesses long-term productivity growth and its immediate determinants in Spain. Over the last 170 years, output per hour worked dominated GDP growth, while hours worked per person shrank by one-quarter and population trebled. Half of labour productivity growth resulted from capital deepening and one-third from efficiency gains (total factor productivity). Labour productivity proceeded steadily, accelerating during the 1920s and from the mid-1950s to the late 1980s, but decelerated thereafter as capital deepening slowed down and TFP stagnated due to the fact that expanding sectors attracted less investment-specific technological progress, largely a result of institutional constraints.