Vassilis Tselios

Education and Income Inequality in the Regions of the European Union

This paper provides an empirical study of the determinants of income inequality across regions of the EU. Using the European Community Household Panel dataset for 102 regions over the period 1995-2000, it analyses how microeconomic changes in human capital distribution affect income inequality for the population as a whole and for normally working people. The different static and dynamic panel data analyses conducted reveal that the relationship between income per capita and income inequality, as well as between a good human capital endowment and income inequality is positive. High levels of inequality in educational attainment are also associated with higher income inequality. The above results are robust to changes in the definition of income distribution and may be interpreted as a sign of the responsiveness of the EU labor market to differences in qualifications and skills. Other results indicate that population ageing, female participation in the labor force, urbanization, agriculture, and industry are negatively associated to income inequality, while unemployment and the presence of a strong financial sector positively affect inequality. Finally, income inequality is lower in social-democratic welfare states, in Protestant areas, and in regions with Nordic family structures.

In search of the ‘economic dividend’ of devolution: spatial disparities, spatial economic policy, and decentralisation in the UK

After a decade of devolution and amid uncertainties about its effects, it is timely to assess and reflect upon the evidence and enduring meaning of any ‘economic dividend’ of devolution in the UK. Taking an institutionalist and quantitative approach, we seek to discern the nature and extent of any economic dividend through a conceptual and empirical analysis of the relationships between spatial disparities, spatial economic policy, and decentralisation. Situating the UK experience within its evolving historical context, we find: (i) a varied and uneven nature of the relationships between regional disparities, spatial economic policy, and decentralisation that change direction during specific time periods; (ii) the role of national economic growth is pivotal in explaining spatial disparities and the nature and extent of their relationship with the particular forms of spatial economic policy and decentralisation deployed; and, (iii) there is limited evidence that any economic dividend of devolution has emerged, but this remains difficult to discern because its likely effects are overridden by the role of national economic growth in decisively shaping the pattern of spatial disparities and in determining the scope and effects of spatial economic policy and decentralisation.

Income inequality, decentralisation and regional development in Western Europe

This paper deals with the relationship between decentralisation, regional economic development, and income inequality within regions. Using multiplicative interaction models and regionally aggregated microeconomic data for more than 100 000 individuals in the European Union (EU), it addresses two main questions. First, whether fiscal and political decentralisation in Western Europe has an effect on within-regional interpersonal inequality. Second, whether this potential relationship is mediated by the level of economic development of the region. The results of the analysis show that greater fiscal decentralisation is associated with lower interpersonal income inequality, but, as regional income rises, further decentralisation is connected to a lower decrease in inequality. This finding is robust to the measurement and definition of income inequality, as well as to the weighting of the spatial units by their population size.

Mapping the European regional educational distribution

The geography of education, especially at subnational level, is a huge black box. Little is known about the distribution of educational attainment and inequality across regions in Europe. This paper addresses this gap in the literature by mapping educational attainment and inequality in 102 regions in Western Europe, using data extracted from the European Community Household Panel (ECHP) covering more than 100,000 individuals over the period 1995–2000. The results of this Exploratory Spatial Data Analysis (ESDA) reveal a strong correlation between levels of educational attainment and inequality across regions in Europe. Regions with similar educational conditions tend to cluster, often within national borders. In addition, a North–South and an urban–rural dimension are evident. Northern regions and large European metropoli have not only the most-educated labour force but also the lowest levels of inequality. Educational inequality seems to be, in any case, a fundamentally within-region phenomenon: 90 percent of the educational inequality in Europe occurs among individuals living in the same region.

Returns to Migration, Education, and Externalities in the European Union

pecuniary returns to migration. This paper addresses this gap, using microeconomic data for more than 100,000 individuals living in the European Union (EU) for the period 1994-2001 in order to analyse whether the individual economic returns to education vary between migrants and nonmigrants and whether any observed differences in earnings between migrants and locals are affected by household and/or geographical (regional and interregional) externalities. The results point out that while education is a fundamental determinant of earnings., European labour markets – contrary to expectations – do not discriminate in the returns to education between migrants and non-migrants. The paper also finds that household, regional, and interregional externalities influence the economic returns to education, but that they do so in a similar way for local, intranational, and supra-national migrants. The results are robust to the introduction of a large number of individual, household, and regional controls.

Is Inequality Good for Innovation

Is inequality good for innovation? This article addresses this question, using aggregated microeconomic data for 102 regions over the period 1995—2000 from the European Community Household Panel (ECHP) data set, complemented with Eurostat’s Regio data. Static and dynamic panel data specifications and Granger causality tests for panel data are used to assess the relationship between patents, included as a proxy for innovation and income inequality. The results indicate that, given existing levels of income inequality in European Union (EU), an increase in a region’s inequality favors innovation. In addition, geographic space is a key factor in explaining the heterogeneous association between innovation and inequality, and innovation is characterized by circular, cumulative, and intraregional spillover effects. The above findings are robust to changes in the definition of income distribution and across inequality measurements.

Toward Inclusive Growth: Is There Regional Convergence in Social Welfare?

Economic and social cohesion at a regional level is one of the main objectives of the European Union (EU). The European regional development policy aims to promote a harmonious, balanced, and sustainable development through inclusive growth. Yet, while economic cohesion, proxied by gross domestic product (GDP) per capita, has attracted significant attention with most studies finding little regional convergence since 1985, social cohesion has been virtually ignored. This article tries to cover this gap by asking the question of whether regional convergence in social welfare, measured by Amartya Sen’s welfare index, has taken place across regions of the EU-15. Using panel data models with or without spatial interaction effects, we find that the absence of convergence in GDP per capita is not matched in terms of social welfare. Welfare levels have converged significantly across European regions and this convergence has been built on a series of structural and institutional factors, among which female participation in the labor force is the most relevant.

Politics and investment: examining the territorial allocation of public investment in Greece

Rodríguez-Pose A., Psycharis Y. and Tselios V. Politics and investment: examining the territorial allocation of public investment in Greece, Regional Studies. This paper discusses how electoral politics shapes the regional allocation of public investment expenditures per capita in Greece. Using regional public investment data for ten political periods (1975–2009), combined with electoral data by constituency, a model is proposed that captures the influence of politics on the regional distribution of public investment expenditures. The results of the analysis point to a strong relationship between electoral results and regional public investment spending. Greek governing parties have tended to reward those constituencies returning them to office. Moreover, an increase in both the absolute and the relative electoral returns of the governing party in a region has traditionally been followed by greater public investment per capita in that region. Regions where the governing party (whether Liberal or Socialist) has held a monopoly of seats have been the greatest beneficiaries of this type of pork-barrel politics.

(Re-)exploring the link between decentralization and regional disparities in Italy

Previous research has suggested that after 1996 devolution caused a reduction in regional disparities in Italy. However the analysis presented here suggests that the decline in regional disparities in Italy between 1996 and 2006 was driven by population dynamics and, to some extent, by the loss of competitiveness and consequent poor relative performance of northern regions. We conclude that links between devolution and the reduction of spatial disparities is unproven and its benefits are temporally and geographically uneven.

Local social engagement, satisfaction, and embeddedness in the Netherlands: which effects matter and for whom?

Abstract This paper examines to what extent, and for whom, different geographical characteristics affect the levels of local social engagement, satisfaction, and embeddedness in the Netherlands. We employ a uniquely detailed dataset of individuals in Dutch neighbourhoods and municipalities, which is examined using a multilevel hierarchical model with spatial interaction effects. The analysis shows that living in a neighbourhood with a high ethnic concentration and low economic development has negative consequences for actual engagement, satisfaction, and embeddedness. However, this effect is more relevant for natives than for immigrants (ie, Turks, Moroccans, Surinamese, and Antilleans). In addition, we4 find no evidence that the relationship between locality and engagement, satisfaction, and embeddedness varies between first-generation and second-generation immigrants.