The determinants of local employment growth in Spain

During the last two decades, the Spanish economy has been growing both in terms of employment and economic activity, and the spatial distribution of both is very uneven. At a high level of disaggregation, when observing figures of local employment growth we find major changes between 1991 and 2001 and 2001–2011 decades. The aim of this paper is to provide a better understanding of the main determinants of local employment growth in Spain, including socio-economic factors as well as the structural characteristics of the area. Using spatial auto-regressive models combined with incremental distances to different population size tiers, we account for the spatial relationship between areas and for the influence of the urban hierarchy. Our spatial units of analysis are Local Labor Markets, since they comprise workers and work places within the same functional region. Our results for Spain confirm how sensitive the empirical analysis is and how the direct and/or indirect effect of some structural and socioeconomic factors over local employment growth may vary along time. The two decades under study reflect two very different patterns of local growth, supporting the idea of designing a la carte local policies, which should be reassessed timely.