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Does Common Agricultural Policy Reduce Farm Labour Migration? A Panel Data Analysis Across EU Regions

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  • Olper, Alessandro
  • Raimondi, Valentina
  • Cavicchioli, Daniele
  • Vigani, Mauro

Abstract

This paper deals with the determinants of labour out-migration from agriculture across 153 EU regions over the 1990-2008 period. The central aim is to shed light on the role played by CAP payments on this important adjustment process. Using static and dynamic panel data methods, we show that standard neo-classic drivers, like the relative income and the relative labour share, represented significant determinants of the inter-sectoral migration of the agricultural labour. Overall, CAP payments have contributed significantly to job creation in agriculture, although the magnitude of the economic effect is quite small. Moreover, Pillar I subsidies have exerted an effect from three to five times stronger than Pillar II payments.

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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 114597.

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Date of creation: 2011
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Handle: RePEc:ags:eaae11:114597

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Keywords: Out-farm Migration; CAP Payments; Labour Markets; Panel Data Analysis; Agricultural and Food Policy; Labor and Human Capital; Q12; Q18; O13; J21; J43; J60;

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  9. Maddala, G S & Wu, Shaowen, 1999. " A Comparative Study of Unit Root Tests with Panel Data and a New Simple Test," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 61(0), pages 631-52, Special I.
  10. Woldehanna, Tassew & Lansink, Alfons Oude & Peerlings, Jack, 2000. "Off-farm work decisions on Dutch cash crop farms and the 1992 and Agenda 2000 CAP reforms," Agricultural Economics, Blackwell, vol. 22(2), pages 163-171, March.
  11. Larson, Donald & Mundlak, Yair, 1997. "On the Intersectoral Migration of Agricultural Labor," Economic Development and Cultural Change, University of Chicago Press, vol. 45(2), pages 295-319, January.
  12. Sven Anders & Johannes Harsche & Roland Herrmann & Klaus Salhofer, 2004. "Regional Income Effects of Producer Support under the CAP," Discussion Papers 012004, Technische Universität München, Environmental Economics and Agricultural Policy Group.
  13. Douarin, Elodie, 2008. "Do decoupled payments really encourage farmers to work more off farm? A micro-level analysis of incentives and preferences," 2008 International Congress, August 26-29, 2008, Ghent, Belgium 44024, European Association of Agricultural Economists.
  14. Mundlak, Yair, 1979. "Intersectoral factor mobility and agricultural growth:," Research reports 6, International Food Policy Research Institute (IFPRI).
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