Economic effects of the Common Agricultural Policy on employment in Austria

The paper estimates the effects of public payments in agriculture on employment in two ways. A partial analysis of FADN-data concentrating on the agricultural sector shows a preservation of 45,000 to 57,000 jobs for the year 2004 in agriculture because of public payments but without taking into account effects of and interdependencies to other sectors. As a second step an input-output analysis estimates the employment effects of a hypothetical redistribution of agricultural subsidies to other sectors. The results show a decrease of 45,000 work places in the primary sector and an increase of 12,000 jobs in other sectors. But in all a decrease of 33,000 work places would be the result under the assumption of a constant volume of overall production. Due to the low income level in the primary sector public payments for agriculture seem to be a relatively cheep possibility to reach the highest possible level of employment with the side effects of keeping settlement in peripheral regions and maintaining the landscape