XX “Convegno Nazionale degli Economisti del Lavoro” (AIEL) Rome, September 22-23, 2005 Growth and Employment in EU Countries and Regions Cristiano Perugini Marcello Signorelli University of Perugia - Department of Economics, Finance and Statistics via Pascoli, 20 06123 Perugia e-mail: perugini@unipg.it and signorel@unipg.it draft Abstract As well-known, starting from the EU White Paper on growth, competitiveness and employment (1993), and continuing with the launch of the European Employment Strategy (1997) and the Lisbon Strategy (2000), two crucial objectives indicated by the European level emerged: (i) the increase of the GDP growth rates and (ii) the improvement of the employment intensity of growth. In this paper, focused on European countries and regions, we discuss and investigate the compared performance, convergence and relationship of the following real variables: per-capita GDP (level and growth) and employment rate (level and growth). In the last decades an increasing part of the theoretical and empirical economic literature has been dedicated to the real convergence process. In order to better investigate the more recent period, we first present a brief review of the theoretical and empirical literature on real convergence and of the relationship between growth and (un)employment (Section 2). In Section 3, using the Eurostat (regio) database for the period 1995-2003, a compared investigation of the (levels and changes in) per capita GDP and employment rates in EU-25 countries is followed by a convergence analysis for European aggregations (EU-25, EU-15, EMU- 12 and 8-new-EU-members) at the following two (statistical) regional level: Nuts I (σ- and Lowess β-convergence) and Nuts II (σ-, absolute and conditional β-convergence). Besides, a preliminary comparative analysis for EU-15 countries has been dedicated to the co-movements between GDP and employment, and the employment intensity of growth, during the same period 1995-2003. Some of the main results of the paper highlighted (i) a high heterogeneity of the European performance (in terms of GDP level, GDP growth, employment level and employment changes), (ii) the existence of complex “club convergence/divergence” across EU countries and regions, (iii) remarkable differences in the correlation between GDP growth and employment changes, and in the employment intensity of growth. JEL Classification: O47; J23; P50 Keywords: GDP growth, employment, convergence, comparative performance * The paper is still in a preliminary version. However, we want to thank for their useful comments and suggestions Richard Frensch, Enrico Marelli, Milica Uvalic and Vittorio Valli. The usual disclaimers apply.