IMF Working Papers

The Direct Employment Impact of Public Investment

By Marian Moszoro

May 6, 2021

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Marian Moszoro. The Direct Employment Impact of Public Investment, (USA: International Monetary Fund, 2021) accessed November 8, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

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.

Subject: Employment, Expenditure, Income, Job creation, Labor, National accounts, Public investment spending

Keywords: Construction employment, Employment, Employment effect, Employment impact, Global, Income, Job content, Job creation, Job elasticity, Job intensity, Job multiplier, Public investment spending

Publication Details

  • Pages:

    20

  • Volume:

    ---

  • DOI:

    ---

  • Issue:

    ---

  • Series:

    Working Paper No. 2021/131

  • Stock No:

    WPIEA2021131

  • ISBN:

    9781513573793

  • ISSN:

    1018-5941

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