Urban Public Works in Spatial Equilibrium: Experimental Evidence from Ethiopia

Simon Franklin, Clément Imbert, Girum Abebe and Carolina Mejia-Mantilla

No 16691, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: This paper evaluates Ethiopia's Urban Productive Safety Net Program, which provides employment on local public works to the urban poor, and was rolled out randomly across neighborhoods of Addis Ababa. We find that the program increased public employment and reduced private labor supply among beneficiaries. We also show that it improved local amenities in treated locations, for both beneficiary and non-beneficiaries. We then develop a spatial equilibrium model and leverage unique data on commuting flows to quantify the effect of exposure to changes in labor supply from treated locations on labor markets across the city. Our estimates imply that once fully rolled out the program increased private wages by 18.6%. Finally, we use the model to compute the welfare gains to the poor: when we include the indirect effects on private wages and local amenities the welfare gains are four times larger than the direct benefits from public employment alone.

JEL-codes: I38 J61 O18 R23 (search for similar items in EconPapers)
Date: 2021-11
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Related works:
Journal Article: Urban Public Works in Spatial Equilibrium: Experimental Evidence from Ethiopia (2024)
Working Paper: Urban Public Works in Spatial Equilibrium: Experimental Evidence from Ethiopia (2023)
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