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Abstract
This paper deals with the determinants of labour out-migration from agriculture across
153 EU regions over the 1990-2008 period. The central aim is to shed light on the role
played by CAP payments on this important adjustment process. Using static and dynamic
panel data methods, we show that standard neo-classic drivers, like the relative income
and the relative labour share, represented significant determinants of the inter-sectoral
migration of the agricultural labour. Overall, CAP payments have contributed
significantly to job creation in agriculture, although the magnitude of the economic effect
is quite small. Moreover, Pillar I subsidies have exerted an effect from three to five times
stronger than Pillar II payments.