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

Marian Rizov, Sophia Davidova and Alastair Bailey

No 268008, Lincoln Economics and Finance Agecon Working Papers from University of Lincoln, Lincoln International Business School

Abstract: This paper investigates the effects of the CAP payments on the indirectly generated non-farm jobs in small and medium-sized enterprises (SMEs), which are central to job creation. It examines whether there are differences in the effect according to business location - rural or urban, the agricultural supply chain, and according to CAP Pillars. A microeconomic approach is employed, based on firm data from FAME dataset combined with detailed subsidies information from DEFRA. The generalised method of moments (system GMM) is used to estimate the effect of CAP payments in both static and dynamic models of employment. The results suggest positive net spillovers of CAP payments to non-farm employment. Although the magnitude of the effect is small, it is economically significant. In general, Pillar 1 has a stronger positive employment effect relative to Pillar 2. However, Pillar 2 payments have a stronger positive effect per Euro spent in rural areas and within agricultural supply chain.

Keywords: Agricultural and Food Policy; Industrial Organization; Public Economics (search for similar items in EconPapers)
Pages: 35
Date: 2017-12-11
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)
Journal Article: Employment effects of CAP payments in the UK non-farm economy (2019)
Journal Article: Employment effects of CAP payments in the UK non-farm economy (2018)
Journal Article: Employment effects of CAP payments in the UK non-farm economy (2018)
Working Paper: Employment effects of CAP payments in the UK non-farm economy (2018)
Working Paper: Employment effects of CAP payments in the UK non-farm economy (2017)
Working Paper: Employment effects of CAP payments in the UK non-farm economy (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:ulefwp:268008

DOI: 10.22004/ag.econ.268008

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