Direct payments and on-farm employment: Evidence from a spatial regression discontinuity design

Abstract Direct payments are regarded as a suitable instrument to safeguard jobs in the agricultural sector. However, empirical findings date do not unambiguously support this expectation. We further empirically investigate research question on dairy farms with focus family work. Using spatial regression discontinuity design, we rely upon selection unobservables assumptions. The Swiss direct system creates discontinuous jump near border of production zones for amount public subsidies farm receives. two-stage least squares (TSLS) estimate policy-relevant effect, find that an additional CHF 50,000 can generate job female worker Male employment is affected. These results show traditional farming.