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Subsidies and Agricultural Productivity: CAP payments and labour productivity (convergence) in EU agriculture

Maria Garrone, Dorien Emmers, Alessandro Olper and Johan Swinnen ()

LICOS Discussion Papers from LICOS - Centre for Institutions and Economic Performance, KU Leuven

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.

New Economics Papers: this item is included in nep-agr, nep-eff and nep-eur
Date: 2018
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Persistent link: https://EconPapers.repec.org/RePEc:lic:licosd:40918

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