Recycling rate performance and socioeconomic determinants: Evidence from aggregate and regional data across European Union countries

The recycling rates for the EU Member States deviate significantly from the targets set by Directive (2018)/851 for attaining the target of 55% by 2025 (European union, 2018). The aim of the study is to investigate the shortand long-term relationship between macroeconomic variables and the recycling rates performance at both national and regional level. Within this context, four sets of variables are examined, namely sociodemographic, economic and institutional factors. For the purpose of the analysis, the available data acquired from 28 EU countries during the period between 2000 and 2020, as well as from 38 EU regions during 2000-2018 and a panel data approach using OLS, Fixed Effects, Random Effects, FMOLS, and ECM techniques is implemented. Findings robustly indicate that factors such as economic performance, institutional quality, and higher educational attainment significantly contribute to the EU circular economy. Results imply that changes in agricultural intensification and population density significantly affect recycling levels. A particularly significant finding that contributes to the existing literature is the higher speed of adjustment, as indicated by the lagged ECT, at the NUTS-1 level compared to the NUTS-2 level. Thus, recycling policy outcomes, implemented policies, and interventions adjust more rapidly towards their equilibrium state, resulting in immediate impacts and faster changes at NUTS-1 level. On the contrary, it takes more time for these policy outcomes to materialize at the regional scale. Policymakers should prioritize reducing income disparities, improving transparency, investing in education, and promoting sustainable agriculture and waste management infrastructure to support the circular economy.