Regional Productivity Differentials in Three New Member Countries: What Can We Learn from the 1986 Enlargement to the South?

The recent enlargement of the European Union (EU) will lead to unprecedented reforms of region-al policies. We examine the regional distribution of gross value added, employment, and produc-tivity for the Polish, Hungarian, and Czech regions, and compare them to the EU-15 average forthe 1990-2000 period. We study their per capita incomes relative to the EU average and howthese gaps are related to differences in productivity per worker. Finally, we use Esteban’s (2000)shift-share analysis to explore the extent to which regional productivity gaps are due to differencesin industrial mix as opposed to region-specific factors. The results are compared to figures for theSpanish and Portuguese regions a decade before their entrance to the EU.