Regional and Sectoral Economic Studies Vol. 13-1 (2013) EMPLOYMENT, PRODUCTION AND INCOME BY SECTOR IN SPAIN: ECONOMETRIC MODELS AND COMPARISON WITH GERMANY AND THE UNITED STATES, 1965-2010 GUISAN, Maria-Carmen EXPOSITO, Pilar Abstract. We analyse the evolution of real valued-added by sector accordingly to two approaches: production and income in Spain in comparison with Germany, the USA and other OECD countries. We found that the quick increase of employment in Building and Services in Spain for the period 1995-2007 was unsustainable due to the lack of an even evolution of Industrial production. Economic policies for the period 1995-2012 did not foster the necessary increase in real production per inhabitant, in order to reach high rates of employment and convergence of productivity, real wages and real income per capita to more advanced economics. Here we present the estimation of econometrics models which have into account the impact of industrial development on real value-added and employment by sector. Keywords: Employment by sector, Production and Income by Sector, Spain, Agriculture, Industry, Building, Services. JEL codes: J0, J11, J4, O51, O52 1. Real Income per capita, by sector in Spain, Germany and the USA, 1970-2010 We analyze the evolution of real value-added by sector and their impact on employment. Graphs 1 to 4 show the evolution of real income per capita generated in Agriculte, Industry, Building and Services of three countries: Spain, Germany and the USA, for the period 1970-2012. Real Income per capita in Agriculture shows a negative trend, not due to the diminution of production but to the diminution of the Index of Relative Prices of this sector, as it may be seen in the Annex and in the sources there cited. Spain has a level of real income per capita in Agriculture very alike to the value of the USA, and higher than Germany. The value of Spain is lower in Industry and Services. Both USA and Germany are highly industrialized countries for the period 1970-2010, while Spain started with a low value in 1970 and has experienced little increase in real income of industry per capita for the period 1970-2007. These three countries, like many industrialized countries, have experienced a decrease in industrialization in year 2008 with a recovery in the cases of Germany and the USA in 2009-2010. In building sector, Spain evolved from below 600 in year 1970 to 1000 around year 2000, 1800 in year 2007 and diminished to 1400 in year 2010. Germany evolved from an estimation of nearly 1400 in year 1970 to 1000 around year 2000, 800 in year 2005 and slight increase in the prior 2005-2010. The USA evolved from 1000 in year 1970 to 1600 in year 2000, 1800 in year 2007 and a diminution to around 1300 in year 2010. We notice that countries with high levels of real value-added in industry usually reach high levels of real value-added in services, as expected accordingly to the Kaldor´s view of intersectoral relationships analysed in Guisan(2007) and other studies.