Analysing Job Creation Effects of Scaling Up Infrastructure Spending in South Africa

Hélène Maisonnave, Ramos Mabugu, Margaret Chitiga and Véronique Robichaud
Authors registered in the RePEc Author Service: Margaret Mabugu

Cahiers de recherche from CIRPEE

Abstract: In a first for South Africa, we draw on literature on infrastructure productivity to model dynamic economywide employment impacts of infrastructure investment funded with different fiscal tools. According to the South African investment plan, the policy will affect the stock of infrastructure as well as the stock of capital of some private and public sectors. Increased government deficit financed infrastructure spending improves GDP and reduces unemployment. However, in the long term, the policy reduces investment and it is not sustainable for South Africa to let its deficit grow unabated. Increased investment spending financed by tax increases has contrasting implications on unemployment. In the long run, unemployment decreases for all types of workers under one of the scenarios. In the short run, only elementary occupation workers benefit from a decrease in unemployment; for the rest, unemployment rises. Findings have immediate policy implications in various policy modelling areas.

Keywords: Employment; dynamic CGE model; infrastructure scale up; externalities; South Africa (search for similar items in EconPapers)
JEL-codes: D58 D92 H54 H59 (search for similar items in EconPapers)
Date: 2013
New Economics Papers: this item is included in nep-afr, nep-pbe, nep-tre and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

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Related works:
Working Paper: Analysing Job Creation Effects of Scaling Up Infrastructure Spending in South Africa (2019)
Journal Article: Analysing job creation effects of scaling up infrastructure spending in South Africa (2016)
Working Paper: Analysing job creation effects of scaling up infrastructure spending in South Africa (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:lvl:lacicr:1310

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