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Employment effects of CAP payments in the UK non-farm economy

Version 4 2024-03-12, 16:21
Version 3 2023-10-29, 12:44
journal contribution
posted on 2024-03-12, 16:21 authored by Marian RizovMarian Rizov, Sophia Davidova, Alastair Bailey

This paper investigates the effects of the CAP payments on the indirectly generated non-farm jobs in small and medium-sized enterprises (SMEs), which are central to job creation. It examines whether there are differences in the effect according to business location - rural or urban, the agricultural supply chain, and according to CAP Pillars. A microeconomic approach is employed, based on firm data from FAME dataset combined with detailed subsidies information from DEFRA. The generalised method of moments (system GMM) is used to estimate the effect of CAP payments in both static and dynamic models of employment. The results suggest positive net spillovers of CAP payments to non-farm employment. Although the magnitude of the effect is small, it is economically significant. In general, Pillar 1 has a stronger positive employment effect relative to Pillar 2. However, Pillar 2 payments have a stronger positive effect per Euro spent in rural areas and within agricultural supply chain.

History

School affiliated with

  • Department of Accountancy, Finance and Economics (Research Outputs)

Publication Title

European Review of Agricultural Economics

Volume

45

Issue

5

Pages/Article Number

723-748

Publisher

Oxford University Press (OUP) for Foundation of the European Review of Agricultural Economics

ISSN

0165-1587

eISSN

1464-3618

Date Submitted

2018-03-16

Date Accepted

2018-03-20

Date of First Publication

2018-04-17

Date of Final Publication

2018-12-31

Date Document First Uploaded

2018-03-16

ePrints ID

31361

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