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Common Agricultural Policy effects on dynamic labour use in agriculture

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  • Petrick, Martin
  • Zier, Patrick

Abstract

The aim of this study is to investigate the effects of direct payments and rural development measures of the EU’s Common Agricultural Policy (CAP) on employment in agriculture. We work with a dynamic labour demand equation augmented by the full set of policy instruments of the CAP, which is estimated on a panel dataset of 69 East German regions. We present results for four estimators which differ in how they eliminate the fixed effects and how they address the endogeneity of the lagged dependent variable. The results suggest that there were few desirable effects on job maintenance in agriculture. While there is some indication that investment subsidies have halted labour shedding on farms, a rise in the general wage level reduced labour use in agriculture. Changes in direct payments had no employment effects. Generally, labour adjustment exhibits a strong path dependency. Das Ziel dieser Studie ist es, die Auswirkungen der im Rahmen der Gemeinsamen Agrarpolitik (GAP) gewährten Direktzahlungen und der Maßnahmen zur ländlichen Entwicklung auf die Beschäftigung im Agrarsektor zu untersuchen. Wir verwenden hierfür eine dynamische Arbeitsnachfragegleichung, welche um das vollständige Maßnahmenbündel der GAP erweitert wurde. Diese Gleichung wird für einen Paneldatensatz aus 69 ostdeutschen Landkreisen geschätzt. Wir stellen Ergebnisse für vier verschiedene Schätzer vor, die sich darin unterscheiden, wie sie fixe Effekte und die Endogenität der verzögert abhängigen Variable kontrollieren. Die Ergebnisse legen nahe, dass es wenige wünschenswerte Effekte auf die Beschäftigungssicherung in der Landwirtschaft gegeben hat. Einige Ergebnisse sprechen dafür, dass Investitionsbeihilfen den Arbeitskräfteabbau verlangsamt haben. Ein Anstieg des allgemeinen Lohnniveaus hat den Arbeitseinsatz in der Landwirtschaft verringert. Änderungen in den Direktzahlungen hatten keinen Beschäftigungseffekt. Grundsätzlich zeigt die Anpassung des Arbeitseinsatzes eine starke Pfadabhängigkeit.

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Bibliographic Info

Paper provided by Humboldt University Berlin, Department of Agricultural Economics in its series Structural Change in Agriculture/Strukturwandel im Agrarsektor (SiAg) Working Papers with number 134425.

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Date of creation: Aug 2012
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Handle: RePEc:ags:huscpw:134425

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Keywords: Agricultural employment; Dynamic panel data models; Common Agricultural Policy; East Germany; Landwirtschaftliche Beschäftigung; Dynamisches Paneldaten Modell; Gemeinsame Agrarpolitik; Ostdeutschland; Agricultural and Food Policy; Labor and Human Capital; Q18; J43; C23;

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Cited by:
  1. Zier, Patrick, 2013. "Econometric impact assessment of the Common Agricultural Policy in East German agriculture," Studies on the Agricultural and Food Sector in Central and Eastern Europe, Leib­niz Institute of Agricultural Development in Central and Eastern Europe (IAMO), volume 71, number 71.
  2. Nordin, Martin, 2013. "Does the Decoupling Reform Affect Agricultural Employment in Sweden? Evidence from an Exogenous Change," Working Papers 2013:40, Lund University, Department of Economics.

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