Subsidies and Employment: Exploring the experience of corporate and family farms in Russia
The paper investigates whether agricultural enterprises and the family farm sector in Russia respond differently to agricultural subsidies with respect to agricultural employment. Results show that investment subsidies work in a conventional capital-labor substitution framework, reducing employment in the sector to which they are applied but indirectly increasing employment in the alternative agricultural sector. Production subsidies increase employment in the family sector characterized by low labor elasticity, but reduce it in the more labor elastic enterprises sector. The remaining covariates have opposing signs in the two models, indicating a qualitative difference between agricultural enterprises and the family sector.