Agricultural Employment and Inter-Sectoral Labour Mobility in Selected EU Member States

In the last century, and especially with the development of European market integration, economies in Europe experienced a deep restructuring of their agricultural sector. The structural shift away from the primary sector activities, with the reallocation of labour across sectors, is an important engine of economic development. Nonetheless, the patterns and drivers of structural change in the New Member States (NMS) have differed in nature, speed and intensity from those of the EU-15. More importantly, the high incidence of farm employment and family workers in some of the NMS, despite low levels of agricultural training and labour productivity, suggests that farming, particularly in the least developed regions, might be the only viable solution for obtaining a minimum standard of living, especially for those who lack the human capital for 'better' employment opportunities.

Against this background, the aim of this research is to investigate the driving forces behind agricultural labour adjustments and, thus, shed light on the facilitators of, and barriers to, labour mobility. The analysis focuses on the linkages between farm and non-farm sectors and explores the determinants of agricultural employment and inter-sectoral labour mobility in six selected Member States (MS): France, Hungary, Italy, Poland, Romania and Slovakia. Using national and European micro-level data from labour force and agricultural business surveys, the econometric analysis employs various discrete choice modelling techniques on cross-section and panel data.

The key message from this research is that skills mismatch, due to inadequate levels of education and vocational training, and labour market characteristics appear to be the most important impediments to the inter-sectoral and spatial mobility of labour. The mixed evidence in the results across MS reflects the heterogeneous organisational and production structures, implying different constraints or prospects for farm survival and hence different capacities to release and absorb labour. Hence, in order to ensure an efficient allocation of labour and a smooth transition across sectors, investments in human capital and the diversification of rural areas constitute crucial rural development policies. Nonetheless, a one-size-fits-all policy is not appropriate for the wide diversity of rural areas and labour markets across MS. Instead, more targeted and diverse measures should be implemented in order to meet particular needs.