How do local resources influence individuals' and households’ ability to meet their basic needs across regions in the European Union? This not-easy-to-answer question has been the focus of a recent report I have prepared for the EU-funded project Mapping Inequalities through the Life Course (Mapineq). My focus was on three critical socio-economic outcomes: poverty, material deprivation, and social exclusion. These outcomes provide a lens to examine the drivers of inequality and how they vary across local contexts.
This research is exploratory and descriptive. While I use statistical methods, including bivariate and multivariate analyses, my findings are correlational rather than causal. The absence of quasi-experimental conditions and the limitations of available data meant that I couldn’t definitively determine whether local resources cause improvements in living standards. Instead, I focused on uncovering patterns and associations to inform future research and policy discussions.
My Approach
To conduct this analysis, I relied on data from NUTS 2 regions, a standard EU classification for regional statistics. I used three indicators to measure living standards:
- The at-risk-of-poverty rate,
- The proportion of people experiencing severe material deprivation, and
- The rate of individuals at risk of poverty or social exclusion.
These outcomes were analysed alongside local economic variables such as GDP per capita, labour market conditions, education levels, and housing availability. While I initially aimed to focus more on housing, the lack of consistent data on its volume and value at the local level limited the depth of my analysis in this area.
Key Findings
The analysis reveals a nuanced picture. Once I accounted for fixed effects—capturing unique, time-invariant characteristics of each region—and national trends, the influence of local variables showed that:
- Local GDP per capita is strongly associated with better living standards for the least well-off. This means that people living in wealthier regions are less likely to experience poverty or material deprivation.
- Other factors, such as local labour market conditions and education levels, appear to have little direct association with poverty and social exclusion when considering regional and national characteristics.
This suggests that broader, structural factors—such as national policies or deeply embedded regional characteristics—may influence living standards more strongly than local variables like education or labour market conditions.
The study highlights the complexity of understanding the drivers of inequality at the regional level. While local GDP stands out as a key factor, the limited role of other variables such as education and employment raises questions about how local and national dynamics interact to shape living standards.
To provide stronger policy guidance, we need better data at a more detailed geographic level and over longer periods. This would allow us to assess whether local economic resources directly improve the well-being of the least well-off or whether their impact is indirect, shaping opportunities and living standards in more subtle ways.
Although my findings do not offer definitive answers, they underscore the importance of regional and national contexts in shaping socio-economic outcomes. I hope this work serves as a foundation for further research and a call for improved data collection to better inform policies that can address poverty and inequality in the European Union.
Acknowledgement:
This publication is part of the Mapineq project, which has received funding from the European Union’s Horizon Europe research and innovation programme under the grant agreement No. 101061645 (www.mapineq.eu). Views and opinions expressed are however those of the authors only and do not necessarily reflect those of the European Union or the European Research Executive Agency (REA). Neither the European Union nor the granting authority can be held responsible for them.
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