The Making of Egalitarian Spain: Growth, Demographics, Politics and the Income Distribution, 1960-1990

Abstract

This article provides a comprehensive picture of the evolution of the distribution of income during the economic expansion of Spain in the second half of the 20th century. It shows that,while there is a relatively stable pattern of inequality reduction from the economic takeoff of the 1960s until well after the consolidation of democracy, the causes of this pattern changed markedly across time. Demographic and economic forces, largely if not completely exogenous to government policy, affected the supply and demand conditions in the labor market during the first years of the economic boom in ways that contributed to a significant reduction of income differences. As Spain grew wealthier, however, market forces became also less egalitarian. However, the establishment of the new democratic regime brought about an important expansion of the welfare state that compensated for the worsening of the pre-fisc distribution of income. A set of social, political and institutional factors specific to Spain can help explain the commitment of democratic Spain to redistributive policies, partly responsible for the reduction of inequality in the latest period.