This contribution analyses the state of regional convergence in the European context. It finds that different country groups have had quite different experiences following the financial crisis and that in most cases there has been little convergence across regions within countries. More importantly, the seemingly permanent differences in regional per capita income are for some countries mainly the result of differences in occupation ratios. Regional differences in productivity (or income per worker) are relatively uniform across the larger member states and in all cases smaller than regional differences in per capita income. Convergence might thus be easier to achieve if cohesion and regional policies were to focus not only on productivity, but also on employment creation.
This paper was originally commissioned by the Laboratorio LUISS sul Mezzogiorno, in Rome, for presentation by the authors at a meeting on ”La nuova dimensione europea delle politiche regionali e di coesione Rome”, 15 December 2017, organised by the Italian Ministry for Economic Development. The Laboratorio LUISS sul Mezzogiorno develops a wide variety of analytical techniques to evaluate various aspects of Southern Italy, including:
- the divide between the North and South,
- quantifying potential productivity and employment,
- best European and Italian practices and the
- diffusion of virtuous models with special attention to innovation, internationalization and entrepreneurship.
This paper was originally published on the website of the Laboratorio LUISS sul Mezzogiorno and can also be accessed here.
Daniel Gros is Director of CEPS; Roberto Musmeci is CEPS Researcher; and Marta Pilati, an intern at CEPS at the time this paper was prepared, is now a student at SciencesPo in Paris.