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 LICOS - Centre for Institutions and Economic Performance from KU Leuven, Faculty of Economics and Business (FEB), LICOS - Centre for Institutions and Economic Performance

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
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:licosp:634340

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