A Country of Waiters: The Economic Consequences of Tourism Specialization

This paper examines the long‐term effects of tourism specialization on per capita income across Spanish municipalities and explores the mechanisms underlying these effects. The analysis relies on two complementary empirical strategies. The first exploits cross‐sectional variation in tourism exposure driven by amenities such as beaches and climate, capturing the expansion of tourism since the 1960s. The second strategy focuses on the tourism growth that occurred during the 1990s and 2000s, using a shift‐share design that interacts the initial share of foreign residents from tourist‐sending countries with national growth in arrivals from these countries. The results show that municipalities experiencing greater increases in tourism specialization exhibit significantly lower levels of per capita income in 2019. In particular, a municipality with a tourism growth rate equal to the sample median has per capita income between 18% and 21% lower. The decline in income is accompanied by a shift in the local economic structure, characterized by higher shares of temporary employment contracts, a reduction in industrial employment, faster population growth and lower levels of educational attainment.