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POLIS Working Papers - Working paper n. 45

Do business incentives increase employment in declining areas? Mean impacts versus impacts by degrees of economic distress

october 2004

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In recent years, the European Union provided generous funding to business incentives targeted at industrial areas that have been facing above average unemployment and industrial job loss. Although billions of euros have been invested in these areas (referred to as "Objective 2" areas), very little is known about the effectiveness of such incentive programs. This paper uses reliable employment data from the Italian National Social Security Agency to estimate the impact of the business incentives offered in the "Objective 2" areas of central and northern Italy between 1995 and 1998. The paper finds the incentives to be most effective if awarded to the sectors that faced the least pre-intervention employment loss within each disadvantaged area.

JEL Classification numbers

O18; R5, R12, C23


Urban and regional economic development; impact evaluation; employment policy; Structural Funds


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Monthly online jounal "POLIS Working Papers" - Registration n.591, 12/05/2006 - Tribunale di Alessandria
ISSN: 2038-7296

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