Modelling the Effects of Immigration on Regional Economic Performance and the Wage Distribution: A CGE Analysis of Three EU Regions

The paper uses a regional Computable General Equilibrium (CGE) model to analyse the effects of immigration on three small remote EU regions located within Scotland, Greece and Latvia. Two migration scenarios are assessed. In the first, total labour supply is affected. In the second, the importance of migratory flows by differential labour skill types is investigated. The results indicate significant differences in the extent to which regional economies are affected by immigration. They also suggest that remote regions are highly vulnerable to the out-migration of skilled workers ('brain-drain') while the in-migration of unskilled workers leads to widening wage inequality.immigration, CGE, skills, wage inequality, brain-drain, regional economies

General Equilibrium Analysis of the Spatial Impacts of Rural Policy

General equilibrium (GE) techniques have recently been used to simulate policy impacts for neighbouring or different rural areas, thus focussing on the important spatial aspect of such policies. A Social Accounting Matrix (SAM) represents production, households, government, etc. in matrix form, while computable GE models introduce greater behavioural flexibility at the cost of parameterisation. Several SAM and CGE models have recently been built for rural regions, while others have tried to represent rural-urban linkages. This paper presents two SAM applications, and one current CGE approach. The first SAM was developed for the analysis of the economic impact of Objective 1 policy on six remote rural areas, including two in Greece. Six specific regional SAMs were used to quantify the growth-generation effects of EU policies and scenarios on these local economies. The second effort used a hybrid three-area SAM for two different rural areas and an adjacent city in Crete to assess the diffusion patterns of economic impacts generated by three types of CAP measure in one of the rural areas. A CGE example, from the ongoing TERA project, seeks to model the determinants of economic agglomeration, and will attempt to cope with rural/urban distance and environmental externalities. Advantages of the SAM approach include its simplicity and availability of data and software. Disadvantages include significant data needs, linear behaviour, no real modelling of growth (development) or price changes, and the fact that some policies apply to many sectors in unknown way. The CGE approach may overcome some of these problems.Community/Rural/Urban Development,

MODELING THE RURAL-URBAN EFFECTS OF CHANGES IN AGRICULTURAL POLICIES: A BI-REGIONAL CGE ANALYSIS OF TWO CASE STUDY REGIONS

The paper uses bi-regional CGE models to analyse the effects of a change in agricultural support on two (very different) case study regions, one within Scotland, the other in Greece. Both regions are predominantly rural in nature but contain an urban centre as well as a rural hinterland. The results show qualitative and quantitative differences in the total effects in both regions as well as differences in the distribution of effects between their rural and urban parts. In particular, the negative effects of a reduction in price support are contained within rural primary sectors in the Scottish region: nonfarm rural sectors and urban sectors all benefit from the policy shock. In contrast, the negative impacts of a reduction in price support are more widely spread in the Greek region, with losers in both the urban and rural areas. These result are attributed to the stronger links between agriculture and first stage processing sectors in the Greek study area and also the ownership of agricultural factors by urban residents. Full decoupling at the regional level is shown to have negative aggregate effects in both study regions, driven by the high import intensity of household commodities. Again however there are gainers as well as losers from the policy shock suggesting a case for spatially and sectorally targeted support to alleviate the potentially negative effects of CAP reform at a regional level.Agricultural and Food Policy, Agricultural Finance, Community/Rural/Urban Development,

EU Island farming and the labelling of its products

Farming in the islands of the European Union faces specific challenges due to isolation and small size, which justify specific policy tools in terms of structural and regional polices. The question whether the output of island farming (island agricultural and food products) is of such a specific quality that labelling it as such by ways of an optional quality term in the sense of Regulation (EC)No 1151/2012 is justified or not. Capturing the socio-economic reality of island farming in the EU as well as the labelling strategies pursued by stakeholders on the market demonstrates that a specific labelling rule for island products has benefits in particular for small producers and/or small islands, but that it would better be accompanied by the labelling of the specific name of the island(s) concerned.JRC.J.4 - Agriculture and Life Sciences in the Econom

Building a Typology of European Rural Areas for the Spatial Impact Assessment of Policies (TERA-SIAP)

Within the TERA-SIAP project, we developed a set of regional typologies (at NUTS3 level) which provide a suitable basis for Spatial Impact Assessments of a range of current and possible kinds of intervention (Generic Policy Issues) for rural areas. From a range of socio-economic models, we selected Regional Input-Output Models for the Spatial Impact Assessment of two Axis 3 measures (diversification of rural economy, and renovation and development of villages). One of the seven typologies developed, which focused on economic diversification, was used to identify a set of representative case study regions. The modelling results for the 16 case regions illustrated the fact that different types of rural economies are clearly associated with different patterns of policy impacts and that typologies can assist in the choice of appropriate representative regions. The combination of typologies and models are shown to have the potential to enhance the capacity for quantitative Spatial Impact Assessment of rural policy.JRC.DDG.J.5-Agriculture and Life Sciences in the Econom

False positive and false negative errors in the design and implementation of agri-environmental policies: a case study on water quality and agricultural nutrients

When designing and implementing agri-environmental policies to reduce nutrient loss, action programmes may falsely address areas where the nutrient issue from agricultural activity is not currently important and is not likely to become so in the future (a false positive), or may fail to address areas where the agricultural nutrient issue is currently important or may likely become so in the future (a false negative). Based on a case study of the Louros watershed in Greece, this work identifies database and modelling sources of false positives and negatives and proposes a decision making process aimed at minimizing the possibility of committing such errors. The baseline is well simulated and shows that the Louro’s watershed falls behind a Good Environmental Status, at least marginally. Simulated mitigation measures show that the river’s status can be upgraded to “Good”, at least as concerns nitrates and ammonium. Simulated climate change does not seem to exert an important positive or negative effect. Land use changes forecasting considerably less cultivated area have a significant effect on Total Phosphorous but not on nitrates or ammonium concentrations. The non-linearity between nutrient disposition (inputs) and nutrient concentration in downstream water bodies (output) and the many factors that affect the nutrient disposition-transportation-concentration chain, highlights the importance of simulating the effects of mitigation actions and of future climate and land use changes before adopting and establishing agri-environmental measures