Do the CAP subsidies increase employment in Sweden? estimating the effects of government transfers using an exogenous change in the CAP

Johan Blomquist, Martin Nordin

Research output: Contribution to journalArticlepeer-review

Abstract

This study evaluates the impact of agricultural subsidies (CAP) on employment outside the agricultural sector. A side-effect of the decoupling reform in 2005 was that Sweden introduced a grassland support which caused a redistribution of payments among regions. This heterogeneity in transfers is used to identify the effects of government transfers on regional labour markets. The effect on employment is estimated using Swedish municipality data for the years 2001 to 2009. The subsidy creates private jobs at a cost of about $26,000 per job, which is consistent with earlier estimates based on US data.

Original languageEnglish
Pages (from-to)13-24
Number of pages12
JournalRegional Science and Urban Economics
Volume63
DOIs
Publication statusPublished - 2017 Mar 1

Subject classification (UKÄ)

  • Economics
  • Economic Geography

Free keywords

  • Agricultural subsidies
  • CAP
  • Employment
  • Government spending
  • Transfer

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