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Farm subsidies and agricultural employment: The education channel

Author

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  • Berlinschi, Ruxanda
  • Van Herck, Kristine
  • Swinnen, Johan F.M.

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.

Suggested Citation

  • Berlinschi, Ruxanda & Van Herck, Kristine & Swinnen, Johan F.M., 2011. "Farm subsidies and agricultural employment: The education channel," 122nd Seminar, February 17-18, 2011, Ancona, Italy 99424, European Association of Agricultural Economists.
  • Handle: RePEc:ags:eaa122:99424
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    File URL: http://purl.umn.edu/99424
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    References listed on IDEAS

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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, August.
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    Cited by:

    1. Jerzy Michalek & Pavel Ciaian & d’Artis Kancs, 2014. "Capitalization of the Single Payment Scheme into Land Value: Generalized Propensity Score Evidence from the European Union," Land Economics, University of Wisconsin Press, vol. 90(2), pages 260-289.
    2. 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.
    3. 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.
    4. Olper, Alessandro & Raimondi, Valentina & Cavicchioli, Daniele & Vigani, Mauro, "undated". "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.

    More about this item

    Keywords

    Agricultural Employment; Farm Subsidies; Education; Credit Constraints; Agricultural and Food Policy; Q12; Q18; I20; J62;

    JEL classification:

    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy
    • I20 - Health, Education, and Welfare - - Education - - - General
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion

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