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Subsidies and agricultural employment: The education channel

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

Abstract

Agricultural employment in industrialized countries has been steadily decreasing despite important levels of farm subsidies. In this paper we provide a new explanation for this puzzle, namely the positive impact of subsidies on the education level of farmers’ children. If farmers are credit constrained, they may underinvest in their children’s education. By increasing farmers’ incomes, subsidies increase investment in education. If more educated children are less willing to become farmers, in the long term subsidies may lead to a reduction of labor supply in the agricultural sector. We provide both theoretical and empirical evidence supporting this argument.

Suggested Citation

  • Berlinschi, Ruxanda & Swinnen, Johan F.M. & Van Herck, Kristine, 2012. "Subsidies and agricultural employment: The education channel," 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil 126776, International Association of Agricultural Economists.
    • Handle: RePEc:ags:iaae12:126776
    DOI: 10.22004/ag.econ.126776
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    1. repec:lic:licosd:31312 is not listed on IDEAS
    2. Swinnen, Johan F.M. & Van Herck, Kristine & Vandemoortele, Thijs, 2012. "The Experience Economy as the Future for European Agriculture and Food?," Bio-based and Applied Economics Journal, Italian Association of Agricultural and Applied Economics (AIEAA), vol. 1(1), pages 1-18, April.

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    Keywords

    Agricultural and Food Policy; Labor and Human Capital;

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