Do Social Transfers Benefit Local Economic Development? The Case of Cash-for-Work Programmes in Jordan

Markus Loewe () and Tina Zintl
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Markus Loewe: Deutsches Institut für Entwicklungspolitik
Tina Zintl: Deutsches Institut für Entwicklungspolitik

No 1467, Working Papers from Economic Research Forum

Abstract: This article investigates what effects cash-for-work (CfW) can have on local economic development (LED). It is based on the hypothesis that CfW, which is targeted provision of jobs to vulnerable households, affects LED directly (through employment and income for workers and the creation of public goods) but also indirectly (through multiplier and investment effects as well as better social cohesion). The article builds on quantitative and qualitative research conducted in Jordan in 2019, Jordan being a particularly interesting case for the topic: Here, different foreign donors have set up a whole bunch of different CfW programmes after 2016 to support Syrian refugees along with vulnerable Jordanians. The results confirm that CfW has an indirect impact on LED through multiplier effects since CfW participants spend most of their income locally. In addition, CfW programmes in Jordan improve the skills and employability of their participants. This upgrading does not transform into higher employment rates, however, because the Jordanian labour market is extremely tight. Finally, the programmes empower women; they open new doors to the labour market and contribute to a – however not irrevocable – change of traditional gender roles. Our suggestion is thus that other refugee host countries set up CfW programmes as well, covering both refugees and low-income nationals.

Pages: 39
Date: 2021-03-20, Revised 2021-03-20
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