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

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

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189 Citations (Scopus)

Abstract

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.

Original languageEnglish
Pages (from-to)578-590
Number of pages13
JournalJournal of Public Economics
Volume94
Issue number9-10
DOIs
Publication statusPublished - Oct 2010
Externally publishedYes

Keywords

  • Quasi-randomized experiment
  • Regional growth
  • Regression-discontinuity design
  • Structural funds

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