Crisis in Latin America : Infrastructure Investment, Employment and the Expectations of Stimulus

Infrastructure investment is a central part of the stimulus plans of the Latin American and the Caribbean (LAC) region as it confronts the growing financial crisis. This paper estimates the potential effects on direct, indirect, and induced employm...

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Bibliographic Details
Main Authors:	Schwartz, Jordan Z., Andres, Luis A., Dragoiu, Georgeta
Format:	Policy Research Working Paper
Language:	English
Published:	2012
Subjects:	ACCOUNTABILITY AIRPORTS ASSET VALUE ASSET VALUES AVERAGE WAGES BAILOUT BAILOUTS BALANCED BUDGET BANK POLICY BEHAVIORAL ECONOMICS BEST PRACTICES BIDS BORROWING CALCULATION CALCULATIONS CAPITAL EXPENDITURE CAPITAL EXPENDITURES CAPITAL GOODS CAPITAL INVESTMENT CAPITAL INVESTMENTS CAPITAL STOCKS CARBON EMISSIONS CASH TRANSFER CASH TRANSFERS COMMERCIAL BANKS COMMODITY COMMODITY PRICES COMPETITIVE BIDDING CONSUMER CONSUMER EXPENDITURES CONSUMER GOODS CONSUMERS CONTRIBUTION CONTRIBUTIONS COST OF CAPITAL CREDITS CURRENT EXPENDITURES DEBT DEBT FINANCING DEFICITS DEVELOPING COUNTRIES DEVELOPING COUNTRY DISBURSEMENT DISBURSEMENTS DRAINAGE DRIVING ECONOMIC ACTIVITY ECONOMIC DEVELOPMENT ELASTICITY EMISSIONS ENVIRONMENTAL IMPACTS FEDERAL RESERVE FINANCIAL CRISES FINANCIAL CRISIS FINANCIAL FLOWS FINANCIAL INSTITUTIONS FINANCIAL MARKETS FINANCIAL POSITION FINANCIAL SECTOR FINANCIAL SECTORS FISCAL CONDITIONS FISCAL POLICIES FISCAL POLICY FISCAL SUSTAINABILITY GENERAL POPULATION GLOBAL ECONOMY GOVERNMENT DEBT GOVERNMENT GUARANTEES GOVERNMENT INVESTMENT GOVERNMENT REVENUE GOVERNMENT SPENDING GROSS DOMESTIC PRODUCT HIGHWAY HIGHWAY ADMINISTRATION HIGHWAY CONSTRUCTION HIGHWAY PROJECTS HUMAN DEVELOPMENT INCOME INFLATION INFRASTRUCTURE DEVELOPMENT INFRASTRUCTURE FINANCE INFRASTRUCTURE INVESTMENT INFRASTRUCTURE INVESTMENTS INFRASTRUCTURE PROJECTS INFRASTRUCTURE REHABILITATION INSURERS INTEREST RATES INTERNATIONAL BANK INTERNATIONAL FINANCE INVESTMENT DECISION INVESTMENT PROGRAM INVESTMENT PROGRAMS INVESTMENT PROJECTS INVESTMENTS IN HIGHWAYS JOB CREATION JOB LOSS LABOR COSTS LABOR MARKET LEGISLATION LIGHT RAIL LIQUIDITY MACROECONOMICS MARKET DEVELOPMENT MARKET EFFICIENCY MICROENTERPRISES MINIMUM WAGE MINIMUM WAGES MODES OF TRANSPORT MONETARY POLICY MORTGAGE MORTGAGE HOLDERS OPERATING COSTS OPPORTUNITY COST ORIGINAL INVESTMENT PENSION POLITICAL ECONOMY POVERTY ALLEVIATION PRIVATE CAPITAL PRIVATE FINANCING PRIVATE HOUSING PROBABILITIES PRODUCTIVITY PUBLIC EXPENDITURE PUBLIC EXPENDITURES PUBLIC HOUSING PUBLIC INVESTMENT PUBLIC INVESTMENTS PUBLIC SERVICES PUBLIC SPENDING PUBLIC WORKS RAIL RECESSION RECESSIONS REINVESTMENT RESERVES RETURN ROAD ROAD INFRASTRUCTURE ROAD INVESTMENT ROAD MAINTENANCE ROAD MANAGEMENT ROADS ROUTES RURAL INFRASTRUCTURE RURAL ROADS SAFETY SAFETY NET SALARY SALES SANITATION SENIOR SHORT-TERM GOALS SMART TRANSPORTATION SOLVENCY STOCK MARKET STOCK MARKETS STOCKS STREETS SUM OF MONEY TAX TAX CREDITS TAX REFORM TELECOMMUNICATIONS TRANSPORT TRANSPORT EQUIPMENT TRANSPORT POLICY TRANSPORT POLICY INSTITUTE TRANSPORT SECTOR TRANSPORTATION TRANSPORTATION POLICY TRANSPORTATION SPENDING TRUE TYPE OF INVESTMENT UNEMPLOYED UNEMPLOYMENT UNSKILLED WORKERS URBAN ROADS URBAN SERVICES WAGE WAGES WATER SUPPLY WORTH
Online Access:	http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20090721084348 http://hdl.handle.net/10986/4201

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Summary:	Infrastructure investment is a central part of the stimulus plans of the Latin American 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 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.

Crisis in Latin America : Infrastructure Investment, Employment and the Expectations of Stimulus

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