Publication: Crisis in LAC : Infrastructure Investment and the Potential for Employment Generation
Date
2009-05
ISSN
Published
2009-05
Author(s)
Abstract
Infrastructure investment is a central
part of the stimulus plans of the Latin America and
Caribbean Region (LAC) 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 US$1billion 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 US$1billion 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.
Citation
“Tuck, Laura; Schwartz, Jordan; Andres, Luis. 2009. Crisis in LAC : Infrastructure Investment and the Potential for Employment Generation. Latin America and the Caribbean Region (LCR) Crisis Briefs. © World Bank, Washington, DC. http://openknowledge.worldbank.org/entities/publication/bd6348ea-0861-52d2-b4bb-868a3b7b1f76 License: CC BY 3.0 IGO.”