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Do the CAP subsidies increase employment in Sweden? estimating the effects of government transfers using an exogenous change in the CAP

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  • Blomquist, Johan
  • Nordin, Martin

Abstract

This study evaluates the impact of agricultural subsidies (CAP) on employment outside the agricultural sector. A side-effect of the decoupling reform in 2005 was that Sweden introduced a grassland support which caused a redistribution of payments among regions. This heterogeneity in transfers is used to identify the effects of government transfers on regional labour markets. The effect on employment is estimated using Swedish municipality data for the years 2001 to 2009. The subsidy creates private jobs at a cost of about $26,000 per job, which is consistent with earlier estimates based on US data.

Suggested Citation

  • Blomquist, Johan & Nordin, Martin, 2017. "Do the CAP subsidies increase employment in Sweden? estimating the effects of government transfers using an exogenous change in the CAP," Regional Science and Urban Economics, Elsevier, vol. 63(C), pages 13-24.
    • Handle: RePEc:eee:regeco:v:63:y:2017:i:c:p:13-24
    DOI: 10.1016/j.regsciurbeco.2016.12.001
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    Cited by:

    1. Rizov, Marian & Davidova, Sophia & Bailey, Alastair, 2019. "Employment effects of CAP payments in the UK non-farm economy," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, pages 147-161.
    2. Bojnec, Štefan & Fertő, Imre, 2022. "Do different types of Common Agricultural Policy subsidies promote farm employment?," Land Use Policy, Elsevier, vol. 112(C).
    3. Garrone, Maria & Emmers, Dorien & Olper, Alessandro & Swinnen, Johan, 2019. "Jobs and agricultural policy: Impact of the common agricultural policy on EU agricultural employment," Food Policy, Elsevier, vol. 87(C), pages 1-1.
    4. repec:lic:licosd:40418 is not listed on IDEAS
    5. Zimmert, Franziska & Zorn, Alexander, 2021. "Direct payments and on-farm employment: evidence from a spatial regression discontinuity design," 61st Annual Conference, Berlin, Germany, September 22-24, 2021 317052, German Association of Agricultural Economists (GEWISOLA).

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    More about this item

    Keywords

    Government spending; Transfer; Employment; CAP; Agricultural subsidies;
    All these keywords.

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy; Animal Welfare Policy

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