Subsidies and Agricultural Productivity: CAP payments and labour productivity (convergence) in EU agriculture

Maria Garrone, Dorien Emmers, Alessandro Olper and Johan Swinnen

No 634340, Working Papers of Department of Economics, Leuven from KU Leuven, Faculty of Economics and Business (FEB), Department of Economics, Leuven

Abstract: This paper investigates the relationship between EU agricultural subsidies and agricultural labour productivity by estimating a conditional growth equation. We use more representative subsidy indicators and a wider coverage (panel data from 213 EU regions over the period 2004-2014) than have been used before. We find that, on average, CAP subsidies increase agricultural labour productivity, and the effect is almost entirely due to decoupled Pillar I payments. Coupled Pillar I payments have no impact. The impact of Pillar II is mixed.

Pages: 39
Date: 2018-12
New Economics Papers: this item is included in nep-agr and nep-eff
Note: paper number 409/2018
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Published in LICOS Discussion paper series, pages 1-39

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Working Paper: Subsidies and Agricultural Productivity: CAP payments and labour productivity (convergence) in EU agriculture (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:ete:ceswps:634340

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