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Trade policy and wage gradients: evidence from a protectionist turn

Author

Listed:
  • Daniel A. Tirado

    (Departament d’Anàlisi Econòmica, Universitat de València, València, Spain)

  • Jordi Pons

    (Departament d’Econometria, Estadística i Economia Espanyola and CAEPS, Universitat de Barcelona, Barcelona, Spain)

  • Elisenda Paluzie

    () (Departament de Teoria Econòmica and CAEPS, Universitat de Barcelona, Av Diagonal 690, 08034, Barcelona, Catalonia, Spain)

  • Julio Martínez-Galarraga

    (Departament d’Anàlisi Econòmica, Universitat de València, València, Spain)

Abstract

In the spirit of Hanson (Econ J 107:113–133, 1997), we analyse, first, the existence of a relationship between the wage level and the market potential of Spanish regions; second, we explore the relative importance of domestic and foreign markets in this relationship; and finally, we examine the existence of a regional nominal wage gradient in Spain during the interwar period (1914–1930) centred on the main industrial cluster, Barcelona, and its transformation following the increase in protectionism in the Spanish economy as well as in the international economy. As suggested by NEG literature, our results support the hypothesis of a relationship between wages and regional market access and show the change in the regional wage structure following the gradual closing of the Spanish economy and of Spain’s trade partners, as a result of the increasing importance of the domestic market. We find evidence of the existence of a regional wage gradient centred on Barcelona which weakened during these years. Therefore, in Spain, during the interwar period, protectionist policies appear to have favoured the loss of centrality of a border region (Barcelona) and the relative rise of other locations.

Suggested Citation

  • Daniel A. Tirado & Jordi Pons & Elisenda Paluzie & Julio Martínez-Galarraga, 2013. "Trade policy and wage gradients: evidence from a protectionist turn," Cliometrica, Journal of Historical Economics and Econometric History, Association Française de Cliométrie (AFC), vol. 7(3), pages 295-318, September.
  • Handle: RePEc:afc:cliome:v:7:y:2013:i:3:p:295-318
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    File URL: http://dx.doi.org/10.1007/s11698-012-0090-y
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    Citations

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    Cited by:

    1. Julio Martinez-Galarraga & Daniel A. Tirado & Rafael González-Val, 2015. "Market potential and regional economic growth in Spain (1860–1930)," European Review of Economic History, Oxford University Press, vol. 19(4), pages 335-358.
    2. Liu, Dan & Meissner, Christopher M., 2015. "Market potential and the rise of US productivity leadership," Journal of International Economics, Elsevier, vol. 96(1), pages 72-87.
    3. repec:cup:jechis:v:78:y:2018:i:01:p:81-117_00 is not listed on IDEAS
    4. Julio Martínez-Galarraga, 2014. "Market potential estimates in history: a survey of methods and an application to Spain, 1867-1930," Working Papers 0051, European Historical Economics Society (EHES).
    5. Francisco J. Beltran Tapia & Julio Martinez-Galarrage, 2015. "Inequality and poverty in a developing economy: Evidence from regional data (Spain, 1860-1930)," Working Papers 0078, European Historical Economics Society (EHES).
    6. Huang, Qiong & Chand, Satish, 2015. "Spatial spillovers of regional wages: Evidence from Chinese provinces," China Economic Review, Elsevier, vol. 32(C), pages 97-109.
    7. Beltrán Tapia, Francisco J. & Díez-Minguela, Alfonso & Martinez-Galarraga, Julio, 2018. "Tracing the Evolution of Agglomeration Economies: Spain, 1860–1991," The Journal of Economic History, Cambridge University Press, vol. 78(01), pages 81-117, March.

    More about this item

    Keywords

    Trade policy; Protectionism; Industrial agglomerations; Wage gradients;

    JEL classification:

    • N64 - Economic History - - Manufacturing and Construction - - - Europe: 1913-
    • N94 - Economic History - - Regional and Urban History - - - Europe: 1913-
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F15 - International Economics - - Trade - - - Economic Integration
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions

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