Beyond absorption: explaining the local labour-market effects of EU funds through territorial implementation alignment in czechia

Despite investment through EU Cohesion Policy, the mechanisms shaping uneven local labour-market outcomes remain insufficiently revealed and explained. Therefore, this paper examines whether EU-funded active employment policies (AEP) correspond to territorial needs and under what conditions financial support is associated with improved labour market outcomes. We applied an integrative analytical framework combining territorial fit, policy coherence and implementation practice. We used a mixed-methods approach to analyse EU interventions across 206 Czech microregions between 2014 and 2023, and we complemented regression results with expert interviews exploring institutional and implementation mechanisms. In this paper, we reveal that funding is predominantly directed towards disadvantaged regions, but higher funding intensity does not systematically correspond to improvements in unemployment. Structural and institutional characteristics matter as well and explain substantial variation in unemployment levels, and changes over time remain considerably less predictable. Interviews identified insufficient targeting, fragmented policy coordination, inconsistent implementation and limited institutional capacities as important potential constraints. The study demonstrates the value of examining territorial implementation alignment (with funding intensity) and highlights the need for more context-sensitive.