Economic Growth and Structural Change in the Iberian Incomes, 1800-2000

This paper analyses the stages of structural change between the three main sectors of the Iberian economies. We also measure the contribution of structural change to economic growth in the long term and we disaggregate within the three sectors to determine the leading industries at each stage of economic transformation. Finally, we also study the contribution of these sectors to economic growth. Our work shows that both Iberian countries were latecomers in industrialisation and also in agricultural success. With a late start in the mid-nineteenth century in relation to the core European countries, they advanced in terms of structural change during the interwar period and experienced post-1950 growth miracles. Major changes took place when technological change and foreign markets were adapted to their factor endowments. The main differences between both countries were the slow path of Portugal in relation to Spain, and the less intense Portuguese structural change, with agriculture having a lower and services a higher share of GDP and employment during the nineteenth century with the opposite being the case in the twentieth century. Within the industrial sector, light industries and industries less intensive in skilled labour and capital had a higher importance in Portugal than in Spain.