The Direct Employment Impact of Public Investment

Marian Moszoro

MPRA Paper from University Library of Munich, Germany

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: Crisis; Public Investment; Infrastructure; Stimulus; Employment; COVID; Recovery (search for similar items in EconPapers)
JEL-codes: E12 E22 E24 H54 (search for similar items in EconPapers)
Date: 2021-05-07
New Economics Papers: this item is included in nep-mac and nep-tid
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Citations: View citations in EconPapers (1)

Published in IMF Working Paper 21/131 (2021): pp. 1-20

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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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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:107930

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