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Subsidies and agricultural employment: The education channel

Ruxanda Berlinschi, Johan Swinnen () and Kristine Van Herck ()

No 126776, 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil from International Association of Agricultural Economists

Abstract: Agricultural employment in industrialized countries has been steadily decreasing despite important levels of farm subsidies. In this paper we provide a new explanation for this puzzle, namely the positive impact of subsidies on the education level of farmers’ children. If farmers are credit constrained, they may underinvest in their children’s education. By increasing farmers’ incomes, subsidies increase investment in education. If more educated children are less willing to become farmers, in the long term subsidies may lead to a reduction of labor supply in the agricultural sector. We provide both theoretical and empirical evidence supporting this argument.

Keywords: Agricultural and Food Policy; Labor and Human Capital (search for similar items in EconPapers)
Pages: 42
Date: 2012
New Economics Papers: this item is included in nep-agr and nep-lab
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Persistent link: https://EconPapers.repec.org/RePEc:ags:iaae12:126776

DOI: 10.22004/ag.econ.126776

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