EUROPEAN FUNDS AND EMPLOYMENT CONVERGENCE AT A REGIONAL LEVEL

At least three of the headline goals of the EU 2020 Strategy for smart, sustainable and inclusive growth relate directly to employment and productivity. In particular, the first target of the Strategy fosters a high-employment economy (at least 75% of the 20-64 year-olds EU citizens) that delivers territorial cohesion, and the European Structural Investment (ESI) Funds are the most intensively instruments used by the EU institutions for encouraging the convergence. Having regard to the close links between the programming periods of the ESI Funds, this work throws new insights into whether and how the 2007-2013 period contributed to employment convergence at a regional level within a set of European countries, exploring the extent to which the progress reached in this period laid the basis for the time after. Using official data level (i.e., Eurostat, Istat, and SIEPI) at NUTS2 from 2000 to 2016, the effect of the regional funds on local employment is exploited by the Difference-in-Difference (DiD) method. Moreover, we perform an extended DiD model by controlling for a set of institutional, political, and socio-economic factors, in order to investigate the main reasons behind the potential failure of the EU funding policies in Italy. The poor quality of institutions and the heterogeneous socio-economic development prevented or delayed synergies between funding sources in Italy, restricting national resources if a larger availability of European funds existed.