Structural Change and Polarisation in the Rural-urban Divide

This paper analyses whether in the EU there is a growing economic divide between urban and rural regions. Typically in the EU-27 and elsewhere, urban regions thrive economically and are centres of business, education, innovation and technology. Rural regions in turn are economically and socially less prosperous and threatened by outward migration, brain drain and negative rates of population growth. The aim of the paper is to explore the latest trends in economic convergence in EU-27 NUTS-3 regions and to analyse whether, over the past 20 years, the polarisation between urban and rural regions has increased or declined. Second, the paper investigates the contribution of globalisation-related structural change to territorial economic development in the EU, and looks at whether or not an increasing specialisation in the production of tradable goods has benefited regional ecoomic growth. Finally, it analyses whether this structural change has had a different impact on urban and rural regions, and thus whether it has been a source of regional polarisation. Our results suggest that there was no increase in the polarisation of GDP per capita levels. Globalisation-related structural change had positive growth effects may have contributed to a reduction in regional GDP per capita disparities. This effect is not restricted to particular types of NUTS-3 regions, but applies equally to urban, intermediate and rural regions.