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Public Investments and Job Creation: from employment-impact assessments to employer of last resort. A presentation at the Global Development and Environment Institute of Tufts University July 24, 2014 by Steven Miller [email protected]
A presentation at the Global Development and Environment Institute of Tufts University
July 24, 2014
by Steven Miller
This presentation attempts to link project level experiences on job creation with a larger vision of economic and employment policy.
Likewise we believe that work in developing countries is relevant to the experiences of more industrialized countries, including those in the US.
Typically job creation is seen from a small number of broad perspectives:
In this presentation, I shall to examine an enhanced role which the public sector can and should play in job creation, mainly through public investment programmes and policies.
Source: Technology Choice: Man or Machine, including case studies from Lesotho and Zimbabwe, Lennartsson, M. and Stiedl, D., ILO, 1995.
*70,6 million USD
Labor Market Outcomes of Infrastructure Expenditures under the American Recovery and Reinvestment Act
Ajit Zacharias, Thomas Masterson and Kijong Kim
Levy Economics Institute of Bard College
January 13, 2009
A Report for the International Labor Organization
Infrastructure expenditures constitute only a small portion of the total potential fiscal stimulus from the ARRA. Grants by the federal government to state and local governments for infrastructure investments are estimated to be $44 billion, or 5.6 percent of the projected total budgetary cost of the ARRA over the period 2009-2019 (CBO, 2009).
Note: A broader definition of “infrastructure” would suggest total expenditures worth nearly $90 billion, or about 11.4 percent of the total ARRA stimulus.
Tax cuts, transfers to individuals, and transfers to state and local governments to support public education and medical assistance for the poor (Medicaid) account for 82 percent of the ARRA. Thus, it is reasonable to assume that the effects of the ARRA on aggregate output and employment will be influenced, at least in the immediate future, only to a limited extent by the infrastructure investments made possible by the legislation. The ARRA is mainly a tax-transfer program and not a public works program.
Our estimate of the size of infrastructure expenditures is based on the information collected by the federal government from those who received ARRA funds in the form of contracts, loans and grants. The information pertains to funds awarded and expenditures incurred between February 17, 2009 and September 30, 2009. We combine the data about the recipients of grants and loans to form a database of 117,282 records where each record represents an award of funds made under the ARRA in the form of grants (116,675 records) or loans (607 records). The recipients reported the amount of infrastructure expenditures incurred in the reference period. The total amount awarded in contracts, loans and grants make up about 27 percent of the total fiscal stimulus from the ARRA during the period. The amount actually spent on infrastructure is $4.4 billion (2.6 percent of the total ARRA fiscal stimulus).
ECONOMIC ACTIVITY IN THE
BY J O S H B I V E N S
Economic Policy Institute
Scenario one cancels scheduled cuts stemming from the budget “sequester” automatic, across the board cuts to discretionary spending called for in the Budget Control Act (BCA) of 2011). Under scenario one, a debt-financed $18 billion annual investment in infrastructure yields a $29 billion increase in GDP and 216,000 net new jobs by the end of the first year, with the increased levels then sustained over the next decade.
Note: As of January 2014, a third of the scheduled sequester cuts were cancelled for the next two years only.
Under scenario two, a debt-financed package of green investments totaling $92 billion annually boosts GDP by $147 billion and generates 1.1 million net new jobs by the end of the first year, with the increased levels then sustained over the next decade.
Scenario two implements a package of green investments that includes a large increase in investments in the energy efficiency of residential and commercial buildings and upfront investments to construct a national “smart grid,” yielding $92 billion annually in infrastructure investments over the next decade.
Scenario three makes an ambitious investment in largely traditional infrastructure projects in transportation and utilities (particularly water treatment, distribution, and sewage systems) to nearly close the U.S. “infrastructure deficit” identified by the American Society of Civil Engineers (ASCE) and yield $250 billion annually in infrastructure investment between now and 2020.
Under scenario three, a debt-financed $250 billion annual investment boosts GDP by $400 billion and overall employment by 3 million net new jobs by the end of the first year, with the increased levels then sustained over the seven-year life of the investment.
Under all scenarios, jobs created are disproportionately male, Latino, and skewed away from younger workers.
Improves and maintain levels of aggregate demand
Improves income distribution
Struggles against poverty and exclusion
Fixes a minimum wage for the formal and the informal sector
It is counter cyclical
Was implemented after the 2001-02 crisis
Massive devaluation and 25% of unemployment rate.
Poverty above 50% of the total population
Aimed to provide a job to unemployed people willing to devote 20 hours per week
Centralized administration of the program
Projects at local level
Participation of civil society
2.4 million beneficiaries at the peak in 2004
0.92% of GDP
4.9% of Federal Budget
16% of the all households nationwide
In some provinces, 40% of households
Very young population: 47% below 35 years old
71% female of which 60% female headed households (single parent)
Bakery, Clothing, Bricks, Community farms
Construction and self construction
At individual level or cooperatives
Production of services
Childcare, Elderly car
Community and school kitchens
Health programs support
Education and vocational training