The direct employment impact of public investment

Marian Moszoro

International Journal of Management and Economics, 2024, vol. 60, issue 1, 59-74

Abstract: 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 on infrastructure creates 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 in 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 a higher employment effect. Overall, we estimate that 1% of global GDP in public investment can create more than seven million jobs worldwide through its direct employment effects alone.

Keywords: COVID; employment; public investment; stimulus (search for similar items in EconPapers)
JEL-codes: E22 E24 H54 (search for similar items in EconPapers)
Date: 2024
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https://doi.org/10.2478/ijme-2023-0020 (text/html)

Related works:
Working Paper: The Direct Employment Impact of Public Investment (2021)
Working Paper: The Direct Employment Impact of Public Investment (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:vrs:ijomae:v:60:y:2024:i:1:p:59-74:n:1

DOI: 10.2478/ijme-2023-0020

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