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Does the Common Agricultural Policy Reduce Farm Labour Migration? Panel data analysis across EU regions

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

This paper deals with the determinants of labour out-migration from agriculture across 149 EU regions over the 1990–2008 period. The central aim is to shed light on the role played by payments from the common agricultural policy (CAP) on this important adjustment process. Using static and dynamic panel data estimators, we show that standard neoclassical drivers, like relative income and the relative labour share, represent significant determinants of the intersectoral migration of agricultural labour. Overall, CAP payments contributed significantly to job creation in agriculture, although the magnitude of the economic effect was rather moderate. We also find that pillar I subsidies exerted an effect approximately two times greater than that of pillar II payments.

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Paper provided by Centre for European Policy Studies in its series Factor Markets Working Papers with number 133.

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Length: 25 pages
Date of creation: Jul 2012
Date of revision:
Handle: RePEc:eps:fmwppr:133
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