Advanced

Do the CAP Subsidies Increase Employment in Sweden? Estimating the Open Economy Relative Multiplier Using an Exogenous Change in the CAP

Nordin, Martin LU and Blomquist, Johan LU (2014) In AgriFood Economics Centre. Working Paper
Abstract
This study evaluates the impact of agricultural subsidies (CAP) on unemployment and employment outside the agricultural sector. For the CAP subsidies to have an effect outside the agricultural sector, the subsidies must have a second-order effect. Thus, the Open Economy Relative Multiplier for Sweden is estimated with aggregate municipality data for the years 2001 to 2009. A side-effect of the decupling reform in 2005 was that Sweden was forced to introduce a grassland support which redistributed the payments among the regions. This exogenous redistribution of the CAP is the identifying assumption in this study. The subsidy creates private jobs at a cost of about $20,000 per job, which is consistent with earlier estimates based on US data.
Please use this url to cite or link to this publication:
author
organization
publishing date
type
Working Paper
publication status
published
subject
keywords
Government Spending, Multiplier, Employment, Unemployment, CAP, Agricultural Subsidies
in
AgriFood Economics Centre. Working Paper
issue
3
publisher
AgriFood Economics Centre
language
English
LU publication?
yes
id
e7106909-e03a-4fc0-afce-8e9fe360c55f (old id 4180134)
alternative location
http://www.agrifood.se/Files/AgriFood_WP20143.pdf
date added to LUP
2013-12-02 13:09:19
date last changed
2016-04-16 07:38:52
@misc{e7106909-e03a-4fc0-afce-8e9fe360c55f,
  abstract     = {This study evaluates the impact of agricultural subsidies (CAP) on unemployment and employment outside the agricultural sector. For the CAP subsidies to have an effect outside the agricultural sector, the subsidies must have a second-order effect. Thus, the Open Economy Relative Multiplier for Sweden is estimated with aggregate municipality data for the years 2001 to 2009. A side-effect of the decupling reform in 2005 was that Sweden was forced to introduce a grassland support which redistributed the payments among the regions. This exogenous redistribution of the CAP is the identifying assumption in this study. The subsidy creates private jobs at a cost of about $20,000 per job, which is consistent with earlier estimates based on US data.},
  author       = {Nordin, Martin and Blomquist, Johan},
  keyword      = {Government Spending,Multiplier,Employment,Unemployment,CAP,Agricultural Subsidies},
  language     = {eng},
  number       = {3},
  publisher    = {ARRAY(0x9218830)},
  series       = {AgriFood Economics Centre. Working Paper},
  title        = {Do the CAP Subsidies Increase Employment in Sweden? Estimating the Open Economy Relative Multiplier Using an Exogenous Change in the CAP},
  year         = {2014},
}