the paper constructs sectoral estimates of comparative total factor productivity (TFP). In a growth account-ing framework, the TFP estimates are applied to quantify the contributions of comparative TFP growth andcomparative capital intensity growth to comparative labor productivity growth, both by major sector of theeconomy and for the economy as a whole.The results suggest that the period 1950-2004 witnessed three distinct phases of Spanish performance incomparative labor productivity. The rst phase, from 1950 to 1975, is characterized by a fast convergence process. Convergence was driven by the signicant contribution of manufacturing, both in terms of catch-up performance and structural change, and by the good comparative performance of smaller sectors such as con-struction, utilities and transport and communication. Service sectors also contributed to Spain narrowing theaggregate labor productivity gap, certainly so in the last stage of the catch-up phase, however we lack suf-cient disaggregated evidence to assess the extent of their contribution.
The convergence process stagnatedduring the period 1975-1990, more particularly, three sectoral trends underpinned the aggregate stagnation:rst, sectoral convergence in manufacturing and construction slowed down substantially and reversed towardstheend ofthe1980s, second, in themid-1970sservicesentered aperiod ofsteadydeterioration in comparativelabor productivity performance and third, the good performance of utilities and transport and communication,together with a revival in the comparative productivity performance of agriculture, were instrumental factorsin keeping aggregate comparative productivity at a stationary level. The third phase spans from 1990 upto 2004 and, with the exception of agriculture, is characterized by generalized sectoral divergence. Yet ,given the importance of the service economy at this stage of Spanish development, the declining trend in thecomparative labor productivity performance of services has much to account for divergence at the aggregatelevel.The sectoral growth accounting disaggregation of comparative labor productivity provides valuable ex- planatory insights on the phases identied above. We briey point out the following aggregate ndings: (i)
In thisstudy, servicesincludethreecategories: nanceanddistribution; community, personalandsocialservices(including hotelandrestaurants); and government services.