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On structural change, the social stress of a farming population, and the political economy of farm support

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  • Oded Stark
  • Jan Fałkowski
Abstract
A rationale for providing support to the farm sector in the course of economic development and structural change is a growing gap between the incomes of non‐agricultural workers and the incomes of farmers. Drawing on a model that enables us to analyze the level of social stress experienced by farmers as employment shifts from the farm sector to other sectors, we find that even without an increasing gap between the incomes of non‐agricultural workers and the incomes of farmers, support to farmers might be needed/can be justified. This result arises because under well‐specified conditions, when the size of the farm population decreases, those who remain in farming experience increasing aggregate social stress. The increase is nonlinear: it is modest when the outflow from the farm sector is relatively small or when it is large, and it becomes more significant when the outflow is moderate. This finding can inform policymakers who seek to alleviate the social stress of the farming population as to the timing and intensity of that intervention.

Suggested Citation

  • Oded Stark & Jan Fałkowski, 2019. "On structural change, the social stress of a farming population, and the political economy of farm support," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 27(1), pages 201-222, January.
    • Handle: RePEc:bla:etrans:v:27:y:2019:i:1:p:201-222
    DOI: 10.1111/ecot.12192
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    References listed on IDEAS

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    13. Kuhnen, Camelia M. & Tymula, Agnieszka, 2008. "Rank expectations, feedback and social hierarchies," MPRA Paper 13428, University Library of Munich, Germany, revised Jan 2009.
    14. Oded Stark & Grzegorz Kosiorowski & Marcin Jakubek, 2017. "An Adverse Social Welfare Consequence of a Rich-to-Poor Income Transfer: A Relative Deprivation Approach," Research on Economic Inequality, in: Research on Economic Inequality, volume 25, pages 1-37, Emerald Group Publishing Limited.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    JEL classification:

    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy; Animal Welfare Policy

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