Inequality and poverty in Spain: Insights from a regional convergence analysis

Abstract

We study the dynamics of inequality and poverty across 17 Spanish regions during 2008–2021. Through a club convergence approach, the results show noticeable differences in both indicators, income inequality (S80/S20) and poverty rate: two clubs are endogenously derived from inequality, while the analysis of the poverty was conducted in four clubs. In addition, the results are complemented with the outcomes for the GDP per capita, where more heterogeneity is detected, with three clubs, but with six divergent regions. The ordered logit model allows to identify the driving factors of such clubs. Finally, policy implications are discussed: the findings recommend the need for specific public policies to address regional differences in terms of economic and social growth also considering the trajectories—convergence or divergence—in inequality and poverty and their determining factors.