Dimensions Of Well-Being In Eu Regions: Do GDP And Unemployment Tell us All We Need To Know?

Unemployment and GDP are widely used as proxies for a broader concept of well-being in the European Union, especially at regional level. This paper asks whether such an approach is reasonable. Using data from a range of sources, it examines the association between unemployment, GDP and a number of alternative well-being indicators in five domains – material welfare, education, health, productive activity and social participation. It finds that GDP per capita is not a good proxy for wider regional well-being within a country, but that the regional unemployment rate performs reasonably well. Pooling fifteen member states together, however, regional GDP is a better predictor of a region’s well-being than unemployment. This is because national GDP tells us more about how a country is doing overall than the national unemployment rate. These findings have implications for the European Council’s decision to treat variation in the regional unemployment rates as the sole indicator of regional inequality within Member States, and for the allocation of the Structural Funds.