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Farm Subsidies and Agricultural Employment: The Education Channel

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  • Berlinschi, Ruxanda
  • Van Herck, Kristine

Abstract

Agricultural employment in industrialized countries has been steadily decreasing despite important levels of farm subsidies. We argue that one explanation to this puzzle is the positive impact of subsidies on the education levels of farmers’ children. If farmers are credit constrained, they may underinvest in their children’s education. By increasing farmers’ revenues, subsidies increase investment in education. If more educated children are less willing to become farmers, one long term effect of subsidies is to reduce labor supply in the agricultural sector. We provide a theoretical model and some empirical evidence supporting this argument.

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Bibliographic Info

Paper provided by European Association of Agricultural Economists in its series 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland with number 114248.

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Date of creation: 2011
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Handle: RePEc:ags:eaae11:114248

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Keywords: Agricultural and Food Policy; Labor and Human Capital;

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  1. Ky–sti Pietola & Minna V”re & Alfons Oude Lansink, 2003. "Timing and type of exit from farming: farmers' early retirement programmes in Finland," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 30(1), pages 99-116, March.
  2. Hisham El-Osta & Ashok Mishra & Mary Ahearn, 2004. "Labor Supply by Farm Operators Under “Decoupled” Farm Program Payments," Review of Economics of the Household, Springer, vol. 2(4), pages 367-385, 08.
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Cited by:
  1. Olper, Alessandro & Raimondi, Valentina & Cavicchioli, Daniele & Vigani, Mauro, 2011. "Does Common Agricultural Policy Reduce Farm Labour Migration? A Panel Data Analysis Across EU Regions," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114597, European Association of Agricultural Economists.
  2. Olper, Alessandro & Raimondi, Valentina & Cavicchioli, Daniele & Vigani, Mauro, . "Reallocation of Agricultural Labor and Farm Subsidies: Evidence From the EU Regions," 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil 126645, International Association of Agricultural Economists.
  3. Olper, Alessandro & Raimondi, Valentina & Cavicchioli, Daniele & Vigani, Mauro, 2012. "Does the Common Agricultural Policy Reduce Farm Labour Migration? Panel data analysis across EU regions," Working Papers 128790, Factor Markets, Centre for European Policy Studies.

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