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Employment Effects of CAP Payments in the UK Non-Farm Economy

In: RURAL POLICIES AND EMPLOYMENT TransAtlantic Experiences

Author

Listed:
  • Marian Rizov
  • Sophia M. Davidova
  • Alastair Bailey

Abstract

The effects of the Common Agricultural Policy (CAP) payments on indirectly generated non-farm jobs in small- and medium-sized enterprises (SMEs) are central to job creation. This chapter examines whether there are differences in these effects according to business location (rural or urban), the agricultural supply chain, and according to CAP pillars, using both static and dynamic models of employment. The results suggest positive net spillovers of CAP payments to non-farm employment. Although their magnitudes are small, they are economically significant. In general, Pillar 1 has a stronger positive employment effect than Pillar 2, but Pillar 2 payments have a stronger positive effect per Euro spent in rural areas and within the agricultural supply chain.

Suggested Citation

  • Marian Rizov & Sophia M. Davidova & Alastair Bailey, 2019. "Employment Effects of CAP Payments in the UK Non-Farm Economy," World Scientific Book Chapters, in: Sophia M Davidova & Kenneth J Thomson & Ashok K Mishra (ed.), RURAL POLICIES AND EMPLOYMENT TransAtlantic Experiences, chapter 9, pages 147-161, World Scientific Publishing Co. Pte. Ltd..
    • Handle: RePEc:wsi:wschap:9781786347091_0009
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    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. Unay-Gailhard, İlkay & Bojnec, Štefan, 2020. "Public support effect on natural disaster management: A case study of ice storms in forests in Slovenia," Land Use Policy, Elsevier, vol. 95(C).
    4. Pia Nilsson & Sofia Wixe, 2022. "Assessing long-term effects of CAP investment support on indicators of farm performance," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 49(4), pages 760-795.
    5. Hyytiä Nina, 2020. "Russian Food Import Ban – Impacts on Rural and Regional Development in Finland," European Countryside, Sciendo, vol. 12(4), pages 506-526, December.
    6. Davidova, Sophia & Hennessy, Thia & Thomson, Ken, 2016. "Rural Jobs and the CAP: Spitting into the Wind?," 90th Annual Conference, April 4-6, 2016, Warwick University, Coventry, UK 236364, Agricultural Economics Society.
    7. Lillemets, Jüri & Fertő, Imre & Viira, Ants-Hannes, 2022. "The socioeconomic impacts of the CAP: Systematic literature review," Land Use Policy, Elsevier, vol. 114(C).
    8. 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.
    9. Zimmert, Franziska & Zorn, Alexander, "undated". "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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    JEL classification:

    • P25 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Urban, Rural, and Regional Economics
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy; Animal Welfare Policy

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