Resumen de Spain is Different: Relative Wages 1989-98
In the last decade, the Spanish economy was an exception to the increasing wage inequality between skilled and unskilled workers that was widespread in the majority of the developed countries. Spain suffered, at this time, several exogenous shocks that may have influenced this different tendency.
This paper analyses the determinants of the relative wage through a macroeconomic perspective in Spain across the period 1989-98. Using panel data techniques the author finds evidence that the Trade Model, with the exogenous skilled biased technological progress as the main variable, is the model that best fits in explaining the evolution of the relative wage in the Spanish manufacturing industry from 1989 to 1998. The facts that support this affirmation are: first, it appropriately conjectures the impact of the explaining variables correctly guessing the sign of the coefficients of the explaining variables; second, the technological progress is the only significant variable, with a positive coefficient and it is exogenous; and third, even the huge increase in the relative labor supply, this variable is not significant, as predicted by the trade model.
