50th Congress of the European Regional Science Association: "Sustainable Regional Growth and Development in the Creative Knowledge Economy", 19-23 August 2010, Jönköping, Sweden
The debate over Growth, regional disparities and social inequalities within the European Union (EU) has originated much attention amongst academics and policy makers. This is only so, as there is a clear causal relationship between these and quality of life in general. Public intervention, which can and have been directed both at the supply and the demand side of the economy, has proved necessary, although insuficient as market forces per se have proven inefficient in terms of resource allocation. The objective of the present paper is to analyse, at the regional level, trends in income levels per capita, human capital measured with an education proxy, material deprivation and general well-being. Markov transition matrices will first be used to compare cluster dynamics, using local indicators of spatial autocorrelation (following Rey, 2001). This analysis will be extended to include analysis of within-quadrant movements. A growth model including human capital and material deprivation allowing for spatial lags will be used to evaluate te impact of education and poverty on income levels. The dataset used is taken from the Cambridge Econometrics database, Eurostat and the European Social Survey, for a total of 192 NUTS2 EU regions.