Abstract
The aim of this paper is to analyze wage differentials, and the economic factors behind them, across the Spanish provinces between 1995 and 2001. The results obtained by applying several complementary techniques show that: a) geographic location matters in explaining provincial wage differentials because each province tends to experience wages similar to those of its neighbors; b) these differentials are not very large but, although declining, they are likely to persist in the future; c) the degree of intradistribution mobility is low; d) the main economic factor behind provincial wage differences is the discrepancy in provincial labor productivity; and e) there is a negligible link between provincial unemployment rates and wage levels.
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