Human capital and rural development policy: evidence from European FADN regions

Abstract

This paper analyses the evolution and policy drivers of the productivity of farmers’ human capital in EU agriculture from 1986 to 2010. The empirical analysis employs farm data sourced from the Farm Accountancy Data Network Standard Results as well as Eurostat’s information on farm holders’ educational-attainment levels. Productivities of human capital are measured by the shadow prices for three levels of educational attainment of farm family labour, computed using Data Envelopment Analysis with variable returns to scale, and related to a Malmquist index of total factor productivity and to selected policy variables. The results indicate that productivities of farmers’ human capital trend upwards and are positively associated with rural development payments.