The Direct Employment Impact of Public Investment
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Summary:
We evaluate the direct employment effect of the public investment in key infrastructure—electricity, roads, schools and hospitals, and water and sanitation. Using rich firm-level panel data from 41 countries over 19 years, we estimate that US$1 million of public spending in infrastructure create 3–7 jobs in advanced economies, 10–17 jobs in emerging market economies, and 16–30 jobs in low-income developing countries. As a comparison, US$1 million public spending on R&D yields 5–11 jobs in R&D in OECD countries. Green investment and investment with a larger R&D component deliver higher employment effect. Overall, we estimate that one percent of global GDP in public investment can create more than seven million jobs worldwide through its direct employment effects alone.
Series:
Working Paper No. 2021/131
Subject:
Employment Expenditure Income Job creation Labor National accounts Public investment spending
Frequency:
regular
English
Publication Date:
May 6, 2021
ISBN/ISSN:
9781513573793/1018-5941
Stock No:
WPIEA2021131
Pages:
20
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