This paper analyses the performance of provincial Spanish wages during the period 1985—2003. Using both traditional and recent analytical approaches, related to spatial econometrics, non-parametric and semi-parametric techniques, the paper reveals that a process of wage convergence has taken place. However, this does not preclude that mobility within the provincial wage distribution is small. The paper also shows that the degree of provincial wage flexibility is very low, which is in accordance with the institutional framework of wage formation in Spain.
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