Human Capital and Economic Resilience to Economic and Health Shocks: Accounting for Regional Cycle Variations, Different Economic Dimensions and More Resilience Phases

In a highly interconnected global landscape, where shocks can have far‐reaching spill‐over effects, the emphasis on enhancing resilience has naturally grown, capturing the interest of policymakers. This study examines regional (NUTS2) economic resilience over the Great Recession and the COVID‐19 pandemic. Our resilience framework incorporates diverse economic dimensions, distinct resilience stages while also accounting for the regional business cycle specificities. Relying on a spatially augmented cross‐sectional panel specification, our findings confirm human capital as a crucial determinant in regional crisis response, particularly during the Great Recession. Additionally, regional economies that performed well over the Great Recession also tended to be more resilient to the COVID‐19 shock, suggesting long‐term benefits from building resilience capacity. The heterogeneous drivers of resilience across the two shocks, their unpredictable nature and the variable resilience metrics may suggest that preparing for specific shocks may be ineffective. Instead, policy interventions should strengthen transversal regional capacities – such as human capital and institutional quality – for better reactions across a wider range of stressors in line with regional development theory.