Effects of CAP reform on regional employment in the EU

CAP reform affects employment in the agricultural sector as well as in other sectors of the regional economy through changes in regional and sectoral competitiveness and resulting re-allocation of fixed resources. However, analysis of the relationship between CAP reform and total regional employment for the EU as a whole are scarce. In this paper a rather ad-hoc method is proposed to fill this gap. Both the CAPRI model and the LEITAP model is used. Both models are linked through an econometrically estimated and scenario specific relationship between agricultural income and employment in LEITAP. LEITAP is also used to analyse the employment changes at regional level in the rest of the economy. LEITAP results are regionalized using sectoral employment shares per region in 2020 in the reference scenario. This paper presents and discusses the strengths and the weaknesses of the proposed ad-hoc downscaling approach