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

摘要

Wequantify general equilibriumeffects of place-based policies in amulti-region frameworkwith populationmobility, 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 welfareoptimal 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 regions. (C) 2020 The Authors. Published by Elsevier B.V.