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 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.

Bibliographic Details

Main Authors:	Schwartz, Jordan, Andres, Luis, Dragoiu, Georgeta
Language:	English en_US
Published:	World Bank, Washington, DC 2009-07
Subjects:	ADVANCED ECONOMIES, ADVISERS, AFFORDABILITY, AGGREGATE DEMAND, AIRPORTS, ASSET VALUE, ASSET VALUES, BAILOUT, BAILOUTS, BANK POLICY, BIASES, BIDS, BORROWING, CAPITAL INVESTMENT, CAPITAL INVESTMENTS, CAPITAL STOCKS, CARBON EMISSIONS, CASH TRANSFER, CASH TRANSFERS, COMMERCIAL BANKS, COMMERCIAL LENDING, COMMODITY PRICES, COMPETITIVE BIDDING, CONSUMER CONFIDENCE, CONSUMER EXPENDITURES, CORRUPTION, DAY LABORERS, DEBT, DEBT FINANCING, DEFICITS, DEVELOPING COUNTRIES, DEVELOPING COUNTRY, DEVELOPMENT ECONOMICS, DISBURSEMENT, DISBURSEMENTS, DRIVING, ECONOMIC ACTIVITY, ECONOMIC CRISIS, ECONOMIC DEVELOPMENT, ECONOMIC GROWTH, ECONOMIC POLICY, ECONOMICS, ELASTICITY, EMISSIONS, EMPLOYMENT, EMPLOYMENT GOALS, ENVIRONMENTAL IMPACTS, ENVIRONMENTAL SUSTAINABILITY, EXPENDITURE, EXPENDITURES, FARMERS, FEDERAL RESERVE, FINANCIAL CRISES, FINANCIAL CRISIS, FINANCIAL FLOWS, FINANCIAL INSTITUTIONS, FINANCIAL MARKETS, FISCAL POLICIES, FISCAL POLICY, GLOBAL ECONOMY, GOVERNMENT DEBT, GOVERNMENT GUARANTEES, GOVERNMENT INVESTMENT, GOVERNMENT REVENUE, GOVERNMENT SPENDING, GROSS DOMESTIC PRODUCT, HIGH UNEMPLOYMENT, HIGHWAY, HIGHWAY ADMINISTRATION, HIGHWAY CONSTRUCTION, HIGHWAY PROJECTS, HOUSEHOLDS, HUMAN DEVELOPMENT, INCOME, INDIRECT LABOR COSTS, INFLATION, INFRASTRUCTURE DEVELOPMENT, INFRASTRUCTURE FINANCE, INFRASTRUCTURE INVESTMENT, INFRASTRUCTURE INVESTMENTS, INFRASTRUCTURE PROJECTS, INFRASTRUCTURE REHABILITATION, INITIAL INVESTMENT, INSURERS, INTEREST RATES, INTERNATIONAL BANK, INTERNATIONAL FINANCE, INVESTMENT DECISION, INVESTMENT PROJECTS, INVESTMENTS IN HIGHWAYS, LABOR MARKET, LIGHT RAIL, LIQUIDITY, MACROECONOMIC EFFECTS, MARKET DEVELOPMENT, MARKET EFFICIENCY, MARKET INEFFICIENCIES, MICRO-ENTERPRISES, MINIMUM WAGE, MINIMUM WAGES, MODES OF TRANSPORT, MONETARY POLICY, MORTGAGE, MULTIPLIER EFFECT, OPERATING COSTS, OPPORTUNITY COST, OUTPUTS, PENSION, POLITICAL ECONOMY, PRIVATE CAPITAL, PRIVATE FINANCING, PRODUCTIVITY, PUBLIC HOUSING, PUBLIC INVESTMENT, PUBLIC INVESTMENTS, PUBLIC SPENDING, PUBLIC WORKS, RAIL, RECESSION, RECESSIONS, REINVESTMENT, RESERVES, RETURN, ROAD, ROAD INFRASTRUCTURE, ROAD INVESTMENT, ROAD MAINTENANCE, ROAD MANAGEMENT, RURAL INFRASTRUCTURE, RURAL ROADS, SAFETY, SAFETY NET, SANITATION, SMART TRANSPORTATION, SOLVENCY, STOCK MARKETS, STOCKS, SUPPLY CHAIN, TAX, TAX CREDITS, TELECOMMUNICATIONS, TRANSPORT, TRANSPORT EQUIPMENT, TRANSPORT POLICY, TRANSPORT POLICY INSTITUTE, TRANSPORT SECTOR, TRANSPORTATION, TRANSPORTATION POLICY, TRANSPORTATION SPENDING, TRUE, UNEMPLOYED, UNEMPLOYMENT, UNEMPLOYMENT LEVELS, UNSKILLED LABOR, UNSKILLED WORKERS, URBAN AREAS, URBAN ROADS, VILLAGES, WAGES, WORKING HOURS,
Online Access:	http://documents.worldbank.org/curated/en/2009/07/19516967/crisis-lac-infrastructure-investment-employment-expectations-stimulus https://hdl.handle.net/10986/18718
Tags:	Add Tag No Tags, Be the first to tag this record!