Employment Impact Assessment (EmpIA)

  • Assessing the employment impact of public investment
  • Providing policy advice for developing national strategies and programmes for job creation through infrastructure, environmental and community investment
  • Building national capacities for enhancing the employment outcomes of public investment strategies

Public investment programmes generally have social, economic or environmental development as the primary objective. At the same time such programmes have the potential and can be used as instruments to generate employment, reduce inequalities and provide income support for selected groups in a society. However the employment impacts of public policies and their related investments are not always well understood and the research on this has been limited thus far. Because of this, there have been many instances where the projected employment effects of such investments have been inaccurate or claims of jobs created are not supported by credible monitoring, studies or evidence.

The ILO’s EIIP has been trying to address this knowledge gap through undertaking Employment Impact Assessments to assess the employment potential and provide sound and practical policy advice on strategies for job creation through public investment in infrastructure development and environmental works. This work has evolved in recent years and EIIP is working with academics, policy makers and practitioners beyond the ILO to develop and modify tools and economic models to analyze the employment impact of public investments. These studies often combine micro (project level) studies that look at direct employment impacts with macro-level studies that are able to look at economy wide employment and income effects, including estimates of indirect and induced employment effects. Different tools and methodologies have been introduced for different levels of programming and implementation. Social Accounting Matrices (SAM) have proven to be appropriate models for national or regional levels, and simple input-output tables were helpful in countries where SAMs did not exist or where a simpler and more rapid methodology was required. More dynamic SAM based models like the Dynamic SAM (DySAM) have also been introduced to consider impacts over time. All these models have in common that they quantify impacts of national or regional investment strategies on production, income and employment. They allow for a quantification of jobs as a result of investment.

EIIP has been working on EmpIA in more than ten countries. Ongoing work includes work in South Africa, with the European Commission covering six countries in Africa and Latin America and with the European Investment Bank. In all cases ILO was asked to assess the employment impact of sectoral investment strategies, give recommendations and build capacities for improving the employment outcomes of such strategies.

An Indicator Guide has been produced which compiles, synthesizes and documents evidence from recent EmpIA studies conducted by the ILO. This guide is developed for principal indicators to be included in future EmpIA studies, notably measures of employment and employment creation costs. The Indicator Guide is a companion to the analytical Tools Guide for conducting EmpIA studies. The Tools Guide provides guidance on the models, methods and procedures for assessing the employment impact of infrastructure investment at the level of the project or programme and the wider employment impacts of investment on sectors: (a) from which inputs are purchased for the investment, and (b) which benefit from the consumption of households of workers on infrastructure projects.