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Direct payments and on-farm employment: evidence from a spatial regression discontinuity design

Franziska Zimmert and Alexander Zorn

No 317052, 61st Annual Conference, Berlin, Germany, September 22-24, 2021 from German Association of Agricultural Economists (GEWISOLA)

Abstract: Direct payments are regarded as a suitable instrument to safeguard jobs in the agricultural sector. However, empirical findings to date do not unambiguously support this expectation. We further empirically investigate this research question on dairy farms under weak identifying assumptions using a spatial regression discontinuity design. The Swiss direct payments system creates a discontinuous jump near the border of agricultural production zones for the amount of public subsidies a farm receives. We find that an additional CHF 50,000 can generate a job for a female family worker in the dairy sector. Male employment is not affected. These results show that direct payments can safeguard traditional family farming.

Keywords: Agricultural and Food Policy; Consumer/Household Economics; Political Economy; Research Methods / Statistical Methods (search for similar items in EconPapers)
Date: 2021-11-18
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Persistent link: https://EconPapers.repec.org/RePEc:ags:gewi21:317052

DOI: 10.22004/ag.econ.317052

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