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Abstract:

Journal article
Place-based policies and spatial disparities across European cities
Maximilian v. Ehrlich and Henry G. Overman
June 2020
Paper No' :


Tags: economic geography; human capital; skills; occupational choice; labor productivity; wage level and structure; regional labor markets; population; neighborhood characteristics

Spatial disparities in income and worklessness across areas of the European Union are profound and persistent. Concerns about these disparities and the appropriate policy response are longstanding. Two trends have re-energized popular and academic debate. One is economic: on some dimensions, disparities have stopped narrowing and started to grow. The other is political: some argue that persistent disparities cause discontent and help explain the rise in populist movements (Rodríguez-Pose 2018). We focus on disparities in income and worklessness across EU metropolitan regions, commonly called "metros," using new definitions from OECD and Eurostat. As these metros account for around two-thirds of the population and for larger and growing shares of employment and GDP, their economic performance is crucial for understanding EU disparities. Focusing on them also narrows down the area-based policies that are relevant. It means we have less to say about rural-urban disparities which involve different economic mechanisms and policies. Our metro definition is based on the so-called NUTS3 regions, which divide up Europe into areas of 150,000 to 800,000 people. Our data combines these areas into metro regions: groups of NUTS3 sharing a common labor market and meeting a minimum size threshold. We focus mostly on the "EU-15," which was the group of 15 countries in the EU at the end of 2003, before the EU expanded to central and eastern Europe. We also offer some comparisons to the "EU-28," referring to the