This chapter explores a central argument of this book: that EU social investments will enhance well-being if they improve the capabilities of poor and otherwise disadvantaged people. Under the current legal framework and given domestic funding practices, however, positive well-being effects are only likely in rich regions. Rich areas typically constitute the powerful urban centres around which most wealth has historically accumulated. Much of the inequality in the EU has resulted from the richest people and places pulling away from more rural parts of a region (Collier, 2018). The richer areas tend to have a more skilled regional workforce and better-functioning institutions (Charron, 2016), and their relatively high stock of human and social capital makes them attractive project partners for governments.

In this chapter, I show that this dynamic tends to work to the benefit of labour markets but works to the detriment of distributive justice. That EU funding of human capital can have positive effects on employment is known (Coelho, 2019; Mohl, 2016), but it is not sufficiently recognized that people in poor regions typically cannot take advantage of the related employment growth. Drawing on the Regional Well-Being Dataset introduced in Chapter Four, this chapter shows that EU social investments have positive effects on employment growth and unemployment, but that these effects are small and only hold in rich regions. Moreover, I find no robust effects of EU social investments on youth activity, infant mortality and self-reported health; adverse effects are found on income inequality in poor regions.

In the remainder of this chapter, I lay out how I will quantitatively examine the effects of EU social investments on regional well-being indicators, present the results and discuss the evidence against the backdrop of previous research. I do so for the capability indicators first and then for the distributive justice indicators. The chapter concludes by linking the analysis in this chapter to the qualitative inquiry on these effects in Chapter Six, which will make sense of the statistical results by drawing on official documents, news media and interview evidence.

Estimating capabilities: research design

The best approach to estimating the likely effects of EU funding on well-being at the regional level is by way of regression analysis. Such analyses, if carefully done, can yield reliable estimates of EU funding effects.