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This publication provides evidence on how regions and cities contribute to the national growth and well-being of societies. It does so by providing region-by-region indicators on a wide range of policy fields to examine trends, highlighting the persistence of regional disparities, identifying areas that either are outperforming or lagging behind in their country, and offering indications as to how a region’s contribution to aggregate development could be increased.
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The economic crisis has been both deep and wide. More than five years since the implosion of the global financial system, the economic recovery remains fragile and the effects of the crisis continue to be felt across virtually all OECD countries, especially when it comes to employment, and in particular, the increasingly high levels of youth unemployment.
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Regions are at the forefront of governments’ efforts to boost growth, improve well-being and tackle inequalities, but the economic crisis has increased the gap in GDP per capita between leading and lagging regions in half of the OECD countries. The largest increase in the gap between the best 10% performing regions and the bottom 10% of regions, more than 8 percentage points, occurred in Denmark, Ireland and Slovak Republic. Where regional disparities were reduced, this was due to the decline of the richest regions rather than a catching up of the poorest regions, except for China and India. In three-quarters of the countries studied, the GDP per capita in the best 10% performing regions decreased between 2008 and 2010, with the highest decrease (12%) observed in Canada and Estonia.
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Traditionally, regional policy analysis has used data collected for administrative regions, that is, the regional boundaries as organised by governments. Such data can provide sound evidence on the contribution of regions to national performance as well as on the persistence of disparities within a country. They show, for example, that during the past 15 years, more than 30% of growth in GDP, employment and population within the OECD is attributable to a small number of regions.
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In any analytical study conducted at subnational levels, the choice of the territorial unit is of prime importance. To address this issue, the OECD has classified two levels of geographic units within each member country (). The higher level (Territorial level 2 [TL2]) consists of 363 larger regions while the lower level (Territorial level 3 [TL3]) is composed of 1 802 smaller regions. All the territorial units are defined within national borders, and each TL3 region is contained in one TL2 region. In most cases TL3 regions correspond to administrative regions, with the exception of Australia, Canada, Germany and the United States.
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