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The direct employment impact of public investment Cover

The direct employment impact of public investment

International Journal of Management and Economics
Volume 60 (2024): Issue 1 (March 2024)
By: Marian W. Moszoro  
Open Access
|Mar 2024

Figures & Tables

Figure 1.

Job Content per US$1 Million of additional investment. Notes: The figure shows the estimates of the job content of US$1 million of investment for different sectors and country groups based on regressions of employment on revenues in 1999–2017, covering 47,580 observations for 5,679 privately owned and state-owned enterprises. The stripped bar and the red rhombus represent the labor mobility range and midpoint estimate, respectively, for medium labor intensity. Labor mobility is the easiness of moving across companies within sectors (given by the point estimates in Table 3) and labor intensity is the path-through share to the supply chain in the sector (parametrized between 35% and 65%). The thick horizontal dashes and the black triangle represent the overall maximum and minimum values and the average estimates, respectively, accounting for wide ranges of labor intensity. The estimates for low-income countries are extrapolated from the other estimates. AE: advanced economies; EME: emerging market economies; LIDC: low-income developing economies. Source: Author’s own estimations based on Compustat and Orbis.
Job Content per US$1 Million of additional investment. Notes: The figure shows the estimates of the job content of US$1 million of investment for different sectors and country groups based on regressions of employment on revenues in 1999–2017, covering 47,580 observations for 5,679 privately owned and state-owned enterprises. The stripped bar and the red rhombus represent the labor mobility range and midpoint estimate, respectively, for medium labor intensity. Labor mobility is the easiness of moving across companies within sectors (given by the point estimates in Table 3) and labor intensity is the path-through share to the supply chain in the sector (parametrized between 35% and 65%). The thick horizontal dashes and the black triangle represent the overall maximum and minimum values and the average estimates, respectively, accounting for wide ranges of labor intensity. The estimates for low-income countries are extrapolated from the other estimates. AE: advanced economies; EME: emerging market economies; LIDC: low-income developing economies. Source: Author’s own estimations based on Compustat and Orbis.

Job content in R&D by recipient type

(1)(2)(3)(4)
GovernmentHigher educationBusinessNon-profit
Spending in R&D (US$ million)4.837***(1.281)10.99***(3.970)10.55**(4.609)4.477**(2.020)
Country fixed effectsYesYesYesYes
Cluster at country levelYesYesYesYes
Observations409405414287
R-squared0.6900.4250.6350.331
Number of clusters36363725

Job content by sectors and income group

Advanced economiesLabor mobility
Labor intensityHighMediumLow
EnergyHigh12.29.46.8
Medium8.66.64.7
Low6.65.13.6
RoadsHigh8.96.94.9
Medium6.24.83.4
Low4.83.72.6
Schools and hospitalsHigh6.44.32.4
Medium4.43.01.7
Low3.42.31.3
Water and sanitationHigh7.95.73.4
Medium5.64.02.4
Low4.33.11.9
Emerging market economiesLabor mobility
Labor intensityHighMediumLow
EnergyHigh23.222.321.2
Medium16.215.614.8
Low12.512.011.4
RoadsHigh23.414.96.5
Medium16.410.44.6
Low12.68.03.5
Schools and hospitalsHigh22.217.713.1
Medium15.512.49.2
Low11.99.57.0
Water and sanitationHigh35.124.614.2
Medium24.617.29.9
Low18.913.27.6
Low-income developing countriesLabor mobility
Labor intensityHighMediumLow
EnergyHigh37.935.132.5
Medium26.624.622.7
Low20.418.917.5
RoadsHigh31.422.914.5
Medium22.016.010.2
Low16.912.37.8
Schools and hospitalsHigh35.631.126.5
Medium24.921.818.6
Low19.216.814.3
Water and sanitationHigh53.943.433.0
Medium37.830.423.1
Low29.023.417.8

Employment and GDP in Advanced Economies (AEs) and Emerging Market Economies (EMEs) This appendix contains the list of countries (classified by level of income), the employment in millions of employees, and the GDP in billions of U_S_ dollars_ The sample includes firm-level data from 38 AEs and 63 EMEs, for a total of 101 economies representing 95% of the global GDP_

CountryIncome levelEmployment (millions)GDP (US$ billions)
AlbaniaEmerging Market Economy1.115.4
AlgeriaEmerging Market Economy11.1172.8
ArgentinaEmerging Market Economy17.1445.5
ArmeniaEmerging Market Economy1.613.4
AzerbaijanEmerging Market Economy5.047.2
The BahamasEmerging Market Economy0.212.7
BahrainEmerging Market Economy0.938.2
BarbadosEmerging Market Economy0.15.2
BelarusEmerging Market Economy4.362.6
BelizeEmerging Market Economy0.22.0
BoliviaEmerging Market Economy5.642.4
Bosnia and HerzegovinaEmerging Market Economy1.020.1
BotswanaEmerging Market Economy1.518.7
BrazilEmerging Market Economy92.11,847.0
Brunei DarussalamEmerging Market Economy0.212.5
BulgariaEmerging Market Economy3.166.2
Cabo VerdeEmerging Market Economy0.32.0
ChileEmerging Market Economy8.6294.2
ChinaEmerging Market Economy775.31,4140.2
ColombiaEmerging Market Economy22.9327.9
Costa RicaEmerging Market Economy2.361.0
CroatiaEmerging Market Economy1.460.7
Dominican RepublicEmerging Market Economy4.689.5
EcuadorEmerging Market Economy7.5107.9
EgyptEmerging Market Economy25.9302.3
El SalvadorEmerging Market Economy2.826.9
HungaryEmerging Market Economy4.5170.4
IndiaEmerging Market Economy32.02,935.6
IndonesiaEmerging Market Economy127.11,111.7
IranEmerging Market Economy25.1458.5
JamaicaEmerging Market Economy1.215.7
JordanEmerging Market Economy1.844.2
KazakhstanEmerging Market Economy8.9170.3
KuwaitEmerging Market Economy2.7137.6
MalaysiaEmerging Market Economy15.0365.3
MauritiusEmerging Market Economy0.514.4
MexicoEmerging Market Economy54.41,274.2
MongoliaEmerging Market Economy1.313.6
MoroccoEmerging Market Economy11.2119.0
North MacedoniaEmerging Market Economy0.812.7
OmanEmerging Market Economy2.376.6
PakistanEmerging Market Economy59.8284.2
PanamaEmerging Market Economy1.968.5
PeruEmerging Market Economy16.9229.0
PhilippinesEmerging Market Economy42.1356.8
PolandEmerging Market Economy16.5565.9
QatarEmerging Market Economy2.2191.8
RomaniaEmerging Market Economy8.8243.7
RussiaEmerging Market Economy72.71,637.9
SerbiaEmerging Market Economy2.351.5
SeychellesEmerging Market Economy0.01.6
South AfricaEmerging Market Economy16.6358.8
SurinameEmerging Market Economy0.13.8
ThailandEmerging Market Economy37.4529.2
Trinidad and TobagoEmerging Market Economy0.622.6
TunisiaEmerging Market Economy3.538.7
TurkeyEmerging Market Economy28.2743.7
TurkmenistanEmerging Market Economy2.546.7
UkraineEmerging Market Economy16.4150.4
United Arab EmiratesEmerging Market Economy7.7405.8
UruguayEmerging Market Economy1.759.9
VenezuelaEmerging Market Economy8.470.1
VietnamEmerging Market Economy58.3261.6
AustraliaAdvanced Economy12.91,376.3
AustriaAdvanced Economy4.4447.7
BelgiumAdvanced Economy4.9517.6
CanadaAdvanced Economy19.01,730.9
CyprusAdvanced Economy0.424.3
Czech RepublicAdvanced Economy5.3247.0
DenmarkAdvanced Economy2.9347.2
EstoniaAdvanced Economy0.731.0
FinlandAdvanced Economy2.6269.7
FranceAdvanced Economy25.62,707.1
GermanyAdvanced Economy42.03,863.3
GreeceAdvanced Economy3.9214.0
Hong Kong SARAdvanced Economy3.9373.0
IcelandAdvanced Economy0.223.9
IrelandAdvanced Economy2.3384.9
IsraelAdvanced Economy4.0387.7
ItalyAdvanced Economy23.31,988.6
JapanAdvanced Economy67.45,154.5
KoreaAdvanced Economy26.91,629.5
LatviaAdvanced Economy0.935.0
LithuaniaAdvanced Economy1.453.6
LuxembourgAdvanced Economy0.569.5
Macao SARAdvanced Economy0.455.1
MaltaAdvanced Economy0.214.9
NetherlandsAdvanced Economy8.9902.4
New ZealandAdvanced Economy2.7204.7
NorwayAdvanced Economy2.7417.6
PortugalAdvanced Economy5.0236.4
Puerto RicoAdvanced Economy1.099.9
SingaporeAdvanced Economy3.7362.8
Slovak RepublicAdvanced Economy2.4106.6
SloveniaAdvanced Economy1.054.2
SpainAdvanced Economy19.81,397.9
SwedenAdvanced Economy5.1528.9
SwitzerlandAdvanced Economy5.0715.4
Taiwan Province of ChinaAdvanced Economy11.5586.1
United KingdomAdvanced Economy32.82,743.6
United StatesAdvanced Economy156.921,439.5
Sum 2,204.483,218.7

Immediate Job Content in Selected Infrastructure Sectors

Advanced economies(1)(2)(3)(4)
PoolPanelWithout 2008–2009Revenue increases
Electricity4.278***(0.238)2.363***(0.206)2.390***(0.217)2.433***(0.210)
Roads3.124***(0.114)1.722***(0.128)1.742***(0.141)1.817***(0.142)
Schools and hospitals2.223***(0.238)0.850***(0.125)0.817***(0.116)0.824***(0.166)
Water and sanitation2.778***(0.348)1.206***(0.235)1.184***(0.252)1.153***(0.290)
Fixed effectsCountryFirmFirmFirm
Clustered atFirmFirmFirmFirm
Observations43,48543,48538,97127,244
R-squared0.6370.2010.1980.203
Number of clusters5,1235,1235,1235,123
Emerging market economies(1)(2)(3)(4)
PoolPanelWithout 2008–2009Revenue increases
Electricity8.120***(1.743)7.406**(3.175)8.300**(3.449)7.832**(3.740)
Roads8.178***(1.370)2.287***(0.679)2.037***(0.722)1.902**(0.779)
Schools and hospitals7.764***(2.376)4.578**(1.788)4.777**(2.171)3.898**(1.663)
Water and sanitation12.28***(4.318)4.965*(2.593)5.587*(2.973)4.829 (4.011)
Fixed effectsCountryFirmFirmFirm
Clustered atFirmFirmFirmFirm
Observations4,0954,0953,6602,539
R-squared0.5630.1570.1680.161
Number of clusters556556556556

Sectors and industries by data source

SectorCompustat (NAICS)Orbis (CPA)
Electricity237130 – Power and Communication Line and Related Structures Construction

  • F42.2.1 – Construction of utility projects for fluids

  • F42.2.2 – Construction of utility projects for electricity and telecommunications

Roads

  • 237310 – Highway, Street, and Bridge Construction

  • 333120 – Construction Machinery Manufacturing (Drags, road construction and road maintenance equipment, manufacturing)

  • F42.1 – Construction of roads and railways, including:

  • F42.1.1 – Construction of roads and motorways

  • F42.1.2 – Construction of railways and underground railways

  • F42.1.3 – Construction of bridges and tunnels

Schools and hospitals2362 – Commercial and Institutional Building ConstructionF42.9.9 – Construction of other civil engineering projects n.e.c.
Water and sanitation237110 – Water and Sewer Line and Related Structures ConstructionF42.9.1 – Construction of water projects

Summary statistics

Advanced economiesCountriesObs.MeanStd. Dev.
Revenue2743,48511.014.5
Employees2743,48545.174.4
Emerging market economiesCountriesObs.MeanStd. Dev.
Revenue144,0957.711.8
Employees144,095123.4195.0
DOI: https://doi.org/10.2478/ijme-2023-0020 | Journal eISSN: 2543-5361 | Journal ISSN: 2299-9701
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Language: English
Page range: 59 - 74
Submitted on: Jan 2, 2023
Accepted on: Jul 14, 2023
Published on: Mar 22, 2024
Published by: Warsaw School of Economics
In partnership with: Paradigm Publishing Services
Publication frequency: 4 issues per year
Keywords:
COVID,
employment,
public investment,
stimulus
Related subjects:
Business and economics,
Political economics,
Economic theory, systems and structures,
Business management,
Management accounting, financial controlling, cost calculation, investment

© 2024 Marian W. Moszoro, published by Warsaw School of Economics
This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 License.

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