Public investment programmes generally encompass specific development goals, such as economic growth, poverty reduction and environmental protection. At the same time, such programmes can also be used as instruments to promote employment creation and income generation, in particular for selected vulnerable groups in society.
However, the employment potential and impact of public policies and investments are not always well understood by policy-makers and practitioners. More specifically, while they generally acknowledge the importance of job creation, the employment effects are seldom quantified, qualified or monitored. Because of this, there have been many instances where the projected employment effects are inaccurate or where claims of jobs created are not supported by credible evidence.
EIIP has been addressing this knowledge gap by undertaking Employment Impact Assessments (EmpIAs) to quantify the employment potential and impacts of public investment programmes in the infrastructure sector, particularly in sub-sectors where labour-based construction methods are technically feasible and cost-effective.
EmpIA can be ex-ante where it is used as a prognostic tool to simulate the current and future impacts of a public investment programme or ex-post where it is used to evaluate the employment effects of completed projects. This work has evolved in recent years, and EIIP is working with academics, policy-makers and practitioners beyond the ILO to develop, modify and apply tools and economic models to conduct these assessments.
Using these methods, employment impacts are generally disaggregated by the following types of employment:
- Direct employment is created directly by construction, operation or maintenance activities (including workers directly recruited by contractors and subcontractors, technicians, supervisors and other skilled professional staff).
- Indirect employment is created in the backward-linked industries, supplying tools, materials, plant and equipment for construction and maintenance activities.
- Induced employment is created through forward linkages as households benefiting from direct and indirect employment spend some of their additional income on goods and services in the economy.
- Spin-off/development impacts comprise secondary employment created as a result of an improved or maintained asset within the areas of influence.
Employment impact assessments help to inform decision making and findings can shape policy advice for developing national strategies and programmes for job creation. Engaging national partners in the assessment process builds national capacity for promoting and enhancing the employment outcomes of public investment strategies.