www.econstor.eu The EU Structural Funds as a Means to Hamper Migration

Comparing the current economic situation of the internal markets of the US and the EU, two things are noticeable. On the one hand, the EU is conducting massive regional policy programmes (notably with their Structural Funds) to foster economic cohesion among the 27 nations belonging to the single European market while in the US with its 50 federal states such policies play a rather subordinate role. At first glance, this seems to be consistent with the fact that a low (high) inequality in the economic geography in the US (EU) is observable. Only 2.5% of the total population in the US lives in regions with less than 75% of the US average GDP per capita while in the EU approximately 34% of the total population lives in such regions eligible for structural funds support. But by taking a closer look, on the other hand, it is revealed that the internal mobility of US citizens is significantly higher than that of EU citizens. According to economic theory migration, besides the free flow of goods, services and capital, plays an important role in assuring convergence in a common market. Following this strand of theory no regional policy is needed to achieve economic cohesion among the regions or nations of a common market. Thus, comparing the two internal markets, the question comes up if the lower degree of economic cohesion in the EU has something to do with the lower mobility of EU citizens and a higher degree of structural interventions? To answer this question, the paper consists of three parts. First, the theoretical background concerning migration and the potential need for regional policy is presented, to find out if one of them is a better instrument to achieve a balanced economic development within an internal market. In the second part, we discuss the actual situation of EU internal migration and the structural funds of the EU. In the last part, we examine why migration rates are comparatively low and analyse the interrelation between the regional policy and (internal) migration in the EU. Besides other things like language, culture or institutions this paper is going to argue that structural funds are inhibiting internal migration, which is one of the key measures in achieving convergence among the nations in the single European market. It becomes clear, that the European regional policy aiming at economic cohesion among the 27 member states is inconsistent if the structural funds hamper instead of promoting migration. JEL-Classification: E62, F15, F22