An Impact Analysis of the European Structural Funds on the Variation of the Rate of Employment and Productivity in Objective 1 Regions

Regional policies seek to enable regions to increase their competitiveness and development, and as such one priority Objective of activities financed by Structural Funds is higher employment, higher productivity and economic activity. How efficiently the regions apply the funds is a fundamental issue for the development and continuity of regional policies. We therefore consider that determining the efficiency of European regional policies is an issue of high importance, and this is the main aim of this study. We have considered it appropriate to use the available information to apply a mathematical technique known as Data Envelopment Analysis (DEA), which allows us to calculate the technical efficiency and inefficiency of the Structural Funds applied in the Objective 1 regions for the period 2000–2006. Furthermore, we wish to determine if the regions have been more efficient in creasing their levels of employment or in increasing productivity. Our study applies this methodology along with other methods like regression analysis, profit analysis and factorial analysis to determine the variation in the rate of unemployment and productivity in these European Regions. The study reveals that only eight regions are efficient, although none of them is run in all the models.