The dynamics of fund absorption: evaluating the efficacy of EU structural funds in mitigating regional inequalities—Calabrian case

Abstract

The European Union aims for territorial cohesion, with human capital as a key factor. Assessing how investment in regional human capital enhances this cohesion is therefore essential. This study assesses the impact of the EU Structural Funds (ESFs) in Calabria (Italy), a region grappling with economic challenges and a brain drain phenomenon. Aimed at fostering regional cohesion, ESFs have been directed towards supporting Calabrian graduates’ pursuit of master’s degrees, intending to incentivize their retention or return postgraduation. A comprehensive survey of the beneficiaries of these subsidies was carried out to determine their employability in the region and the probability of the return of migrants, analyzed by logistic regression of the data. Results demonstrate a dual effect: while the quality of education and EU funding positively influence graduates to work in Calabria, acquiring advanced skills paradoxically diminishes this propensity. Moreover, although the likelihood of returning to Calabria for those working elsewhere does increase, ESF support counterintuitively reduces this probability. The findings reveal a vicious cycle; they equip graduates with high-level skills that facilitate their access to the labor market but simultaneously encourage their migration due to more favorable conditions elsewhere. It is suggested that synergies between ESF-funded policies and those supported by the European Regional Development Fund (ERDF) should be encouraged.