Crisis in LAC : Infrastructure Investment, Employment and the Expectations of Stimulus
Infrastructure investment is a central part of the stimulus plans of the Latin America and the Caribbean (LAC) region as it confronts the growing financial crisis. This paper estimates the potential effects on direct, indirect, and induced employme...
| Main Authors: | , , |
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| Format: | Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2014
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2009/07/19516967/crisis-lac-infrastructure-investment-employment-expectations-stimulus http://hdl.handle.net/10986/18718 |
| Summary: | Infrastructure investment is a central
part of the stimulus plans of the Latin America and the
Caribbean (LAC) region as it confronts the growing financial
crisis. This paper estimates the potential effects on
direct, indirect, and induced employment for different types
of infrastructure projects with LAC-specific variables. The
analysis finds that the direct and indirect short-term
employment generation potential of infrastructure capital
investment projects may be considerable averaging around
40,000 annual jobs per United States (U.S.) 1 billion
dollars in LAC, depending upon such variables as the mix of
subsectors in the investment program; the technologies
deployed; local wages for skilled and unskilled labor; and
the degrees of leakages to imported inputs. While these
numbers do not account for substitution effect, they are
built around an assumed basket of investments that crosses
infrastructure sectors most of which are not
employment-maximizing. Albeit limited in scope, rural road
maintenance projects may employ 200,000 to 500,000
annualized direct jobs for every U.S. 1 billion dollars
spent. The paper also describes the potential risks to
effective infrastructure investment in an environment of
crisis including sorting and planning contradictions,
delayed implementation and impact, affordability, and corruption. |
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