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Employment effects of CAP payments in the UK non-farm economy

Marian Rizov (), Sophia Davidova () and Alastair Bailey ()

No 249793, 160th Seminar, December 1-2, 2016, Warsaw, Poland from European Association of Agricultural Economists

Abstract: This study is concerned with assessing the contribution of the EU’s Common Agricultural Policy (CAP) to non-farm employment in the UK, through its direct and indirect effects on agriculture, up- and downstream industries, and the diversification of rural areas. We employ a micro approach, based on company data from FAME dataset combined with detailed subsidies data from DEFRA. We focus on employment in small and medium enterprises (SMEs) which are central for job creation. As a theoretical framework for our empirical firm employment function we employ a monopolistic competition model with delays in adjustment in prices, employment, and capacity. The generalised method of moments (GMM) is used to estimate the effect of CAP payments on both the level and growth of employment. Our estimation results suggest positive spillovers of CAP payments to non-farm employment. Although the magnitude of the effects is small, it is economically significant especially for the rural labour market.

Keywords: Community/Rural/Urban Development; Labor and Human Capital; Political Economy; Public Economics (search for similar items in EconPapers)
Pages: 29
Date: 2016
New Economics Papers: this item is included in nep-agr
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Related works:
Chapter: Employment Effects of CAP Payments in the UK Non-Farm Economy (2019) Downloads
Journal Article: Employment effects of CAP payments in the UK non-farm economy (2019) Downloads
Journal Article: Employment effects of CAP payments in the UK non-farm economy (2018) Downloads
Journal Article: Employment effects of CAP payments in the UK non-farm economy (2018) Downloads
Working Paper: Employment effects of CAP payments in the UK non-farm economy (2018) Downloads
Working Paper: Employment effects of CAP payments in the UK non-farm economy (2017) Downloads
Working Paper: Employment effects of CAP payments in the UK non-farm economy (2017) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:ags:eaa160:249793

DOI: 10.22004/ag.econ.249793

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