Abstract

 

The agricultural sector plays an important role in the European Union, and agricultural subsidies represent one of the key instruments of the Common Agricultural Policy aimed primarily at stabilising farmers’ income. However, their impact on labour productivity remains an open and widely debated issue. The purpose of this paper is to examine the existence, direction, and strength of the relationship between subsidies and labour productivity in European Union countries over the period from 2015 to 2024. The analysis is based on secondary data obtained from the EUROSTAT database and includes a sample of 21 EU Member States. The methodological approach includes descriptive statistical analysis, correlation analysis, and simple linear regression analysis. The results of the descriptive analysis indicate substantial heterogeneity among EU countries in terms of both subsidy levels and productivity. The correlation analysis reveals a weak but statistically significant negative relationship between subsidies and labour productivity. Regression results confirm this finding, showing that higher levels of subsidies are, on average, associated with a slight decrease in productivity, while subsidies explain only a small share of productivity variation. These findings suggest that subsidies, when observed at an aggregate level and without distinguishing their specific forms and purposes, do not automatically contribute to higher labour productivity. The results indicate that labour productivity is influenced by a range of structural and economic factors, and that the effects of subsidies should be considered within a broader analytical framework.

 

Key words: Subsidies, Labour productivity, European Union, Common Agricultural Policy