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Going NUTS: The effect of EU Structural Funds on regional performance

  • Becker, Sascha O.
  • Egger, Peter H.
  • von Ehrlich, Maximilian

The European Union (EU) provides grants to disadvantaged regions of member states to allow them to catch up with the EU average. Under the Objective 1 scheme, NUTS2 regions with a per capita GDP level below 75% of the EU average qualify for structural funds transfers from the central EU budget. This rule gives rise to a regression-discontinuity design that exploits the discrete jump in the probability of EU transfer receipt at the 75% threshold for identification of causal effects of Objective 1 treatment on outcome such as economic growth of EU regions. We find positive per capita GDP growth effects of Objective 1 transfers, but no employment growth effects.

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Article provided by Elsevier in its journal Journal of Public Economics.

Volume (Year): 94 (2010)
Issue (Month): 9-10 (October)
Pages: 578-590

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Handle: RePEc:eee:pubeco:v:94:y:2010:i:9-10:p:578-590
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