The Local Impacts of Agricultural Subsidies: Evidence from the Canadian Prairies
Bollman, Ray D.; Ferguson, Shon M.
We estimate the impact of removing an export subsidy on the local economies of Alberta, Saskatchewan and Manitoba, exploiting the large regional variation of a 1995 reform. We find that the loss of the subsidy resulted in significantly lower farm value-added, farm asset values and local non-farm employment. The results suggest that the subsidy removal had detrimental spillover effects on the local non-agricultural economy that varied spatially across the Prairies. The point estimates suggest that the marginal effect of the subsidy loss on non-agricultural employment was five times as large as those obtained from traditional estimates of the multiplier effect.
Agricultural trade liberalisation; export subsidy; local labour markets; market access; spillovers
Journal of Agricultural Economics
2019, Volume: 70, number: 2, pages: 507-528
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