Inflationary Pressure and Municipal Waste Recycling Performance: Evidence from EU27 Recycling Systems (2010–2023)

This thesis seeks to examine how macroeconomic instability is related to municipal waste recycling performance in the 27 member states of the European Union (EU27) from 2010 to 2023. The study uses a two-way fixed effects panel regression model with Driscoll–Kraay standard errors to analyse the relationship between inflation, selected socio-economic variables, and municipal waste recycling performance. The study adds to the environmental economics and circular economy literature by examining the role of macroeconomic instability in municipal waste recycling systems. The empirical results indicate that inflation is not significantly associated with municipal waste recycling performance (β = 0.0633, p = 0.522). Structural socio-economic factors seem to have a stronger relation with recycling outcomes, though, in contrast. Both tertiary education attainment and unemployment are statistically significant predictors of recycling performance. Tertiary education exhibits a positive relationship with recycling performance (β = 0.9514, p < 0.001), whereas unemployment exhibits a negative relationship (β = −0.8780, p < 0.001). GDP per capita, renewable energy consumption, and circular material use rate do not show statistically significant effects in the final specification. The results indicate that socio-economic factors might be more important in understanding inter-MS municipal waste recycling performance differences than short-term inflationary effects. The findings are relevant for circular economy policy and the European Green Deal, highlighting the importance of education, labour-market conditions, and resilient recycling infrastructure. Overall, the study highlights the importance of assessing the wider macroeconomic and socio-economic environment in policymaking for supporting sustainable transitions in economic uncertainty.