The Direct Employment Impact of Public Investment

Marian Moszoro

No 2021/131, IMF Working Papers from International Monetary Fund

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 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.

Keywords: employment effect; job content; employment impact; job elasticity; job intensity; construction employment; job multiplier; Public investment spending; Employment; Job creation; Income; Global (search for similar items in EconPapers)
Pages: 20
Date: 2021-05-06
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Citations: View citations in EconPapers (1)

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Related works:
Journal Article: The direct employment impact of public investment (2024)
Working Paper: The Direct Employment Impact of Public Investment (2021)
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