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Subsidies and Agricultural Productivity: CAP payments and labour productivity (convergence) in EU agriculture

Author

Listed:
  • Maria Garrone
  • Dorien Emmers
  • Alessandro Olper
  • Jo Swinnen

Abstract

This paper investigates the relationship between EU agricultural subsidies and agricultural labour productivity by estimating a conditional growth equation. We use more representative subsidy indicators and a wider coverage (panel data from 213 EU regions over the period 2004-2014) than have been used before. We find that, on average, CAP subsidies increase agricultural labour productivity, and the effect is almost entirely due to decoupled Pillar I payments. Coupled Pillar I payments have no impact. The impact of Pillar II is mixed.

Suggested Citation

  • Maria Garrone & Dorien Emmers & Alessandro Olper & Jo Swinnen, 2018. "Subsidies and Agricultural Productivity: CAP payments and labour productivity (convergence) in EU agriculture," Working Papers of LICOS - Centre for Institutions and Economic Performance 634340, KU Leuven, Faculty of Economics and Business (FEB), LICOS - Centre for Institutions and Economic Performance.
    • Handle: RePEc:ete:licosp:634340
    Note: paper number 409/2018
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