On the optimal design of place-based policies: A structural evaluation of EU regional transfers

Blouri, Yashar; V. Ehrlich, Maximilian (2020). On the optimal design of place-based policies: A structural evaluation of EU regional transfers. Journal of international economics, 125, p. 103319. Elsevier 10.1016/j.jinteco.2020.103319

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We quantify general equilibrium effects of place-based policies in a multi-region framework with population mobility, trade and agglomeration economies. Using detailed data on EU transfers, we estimate the local effects of different transfer types on productivity, income and transportation costs. Integrating these estimates into the model, we derive the spatial distribution of economic activity and corresponding welfare that would have materialized without transfers. We show that EU transfers have improved welfare. Substantial further welfare gains could be reached by reallocating funds across regions without increasing the budget. We identify the welfare-optimal spatial distribution for each transfer type and show that wage subsidies should rather be directed to few poor and peripheral regions while investments in transport infrastructure are most efficient in highly productive and/or central regons.

Item Type:

Journal Article (Original Article)

Division/Institute:

03 Faculty of Business, Economics and Social Sciences > Department of Economics
03 Faculty of Business, Economics and Social Sciences > Department of Economics > Institute of Economics > Economic Policy and Regional Economics
03 Faculty of Business, Economics and Social Sciences > Department of Economics > Institute of Economics

UniBE Contributor:

v. Ehrlich, Maximilian

Subjects:

300 Social sciences, sociology & anthropology > 330 Economics

ISSN:

0022-1996

Publisher:

Elsevier

Language:

English

Submitter:

Dino Collalti

Date Deposited:

03 Sep 2020 12:13

Last Modified:

06 Sep 2020 02:58

Publisher DOI:

10.1016/j.jinteco.2020.103319

BORIS DOI:

10.7892/boris.142191

URI:

https://boris.unibe.ch/id/eprint/142191

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