ROLE OF FINANCIAL SUBSIDIES ALLOCATED BY THE CAP AND OUT EMIGRATION IN ROMANIAN RURAL AREAS

Abstract

In all European countries there has been a significant emigration from the countryside and this has been particularly intense in some nations after the collapse of Communist regimes. On average every year more than 15.000 Romanian people emigrate to other countries. The purpose of this paper was to investigate by a quantitative approach over the time 2007-2013 the main correlation between the emigration in all Romanian counties and financial supports allocated by the Common Agricultural Policy. The methodology has used a multiple regression model comparing Fixed Effect (FE) panel data to pooled Ordinary Least Square (OLS). Hausman’s test has pointed out as the FE approach has been the best in estimating the parameters of the multiple correlation. Findings have highlighted out a positive correlation between rural emigration and financial payments allocated by the first pillar of the CAP. The impact of financial supports allocated by the second pillar of the CAP has not implied any effects in reducing emigration from Romanian countryside. In general, less favoured rural areas, characterised by a low level of assets and investments have had the highest level of permanent emigration. Summing up, the Rural Development Plan should implement the financial allocation towards rural areas which recently are involved in an intense process of counter-urbanization from urban space.

Keywords

• permanent emigration
• multiple regression model
• panel data
• Rural Development Plan
• counterurbanization.