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Crisis in Latin America

Author

Listed:
  • Jordan Schwartz

    (The World Bank, jschwartz3@worldbank.org)

  • Luis Andres

    (The World Bank, landres@worldbank.org)

  • Georgeta Dragoiu

    (The World Bank, gdragoiu@worldbank.org)

Abstract

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 article 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 sub-sectors in the investment programme; the technologies deployed; local wages for skilled and unskilled labour; and the degrees of leakages to imported inputs. While these numbers do not account for a substitution effect, they are built around an assumed ‘basket’ of investments that crosses infrastructure sectors most of which are not employment-maximising. Albeit limited in scope, rural road maintenance projects may employ 200,000 to 500,000 annualised direct jobs for every US$ 1billion spent. The article 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.

Suggested Citation

  • Jordan Schwartz & Luis Andres & Georgeta Dragoiu, 2009. "Crisis in Latin America," Journal of Infrastructure Development, India Development Foundation, vol. 1(2), pages 111-131, December.
    • Handle: RePEc:sae:jouinf:v:1:y:2009:i:2:p:111-131
    DOI: 10.1177/097493060900100202
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    Citations

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    Cited by:

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    2. Saima Nawaz & Saba Anwar & Nasir Iqbal, 2021. "The Spatial Effects of Road Infrastructure on Employment in Pakistan: Quantifying the Role of Complementary Factors," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 60(3), pages 309-330.
    3. Hallegatte, Stephane & Bangalore, Mook & Bonzanigo, Laura & Fay, Marianne & Narloch, Ulf & Rozenberg, Julie & Vogt-Schilb, Adrien, 2014. "Climate change and poverty -- an analytical framework," Policy Research Working Paper Series 7126, The World Bank.
    4. Elliott, Robert J.R. & Lindley, Joanne K., 2017. "Environmental Jobs and Growth in the United States," Ecological Economics, Elsevier, vol. 132(C), pages 232-244.
    5. Leopoldo Laborda & Daniel Sotelsek, 2019. "Effects of Road Infrastructure on Employment, Productivity and Growth: An Empirical Analysis at Country Level," Journal of Infrastructure Development, India Development Foundation, vol. 11(1-2), pages 81-120, June.
    6. Benjamin Jones, 2011. "Driving A Green Economy Through Public Finance And Fiscal Policy Reform," Journal of International Commerce, Economics and Policy (JICEP), World Scientific Publishing Co. Pte. Ltd., vol. 2(02), pages 325-349.
    7. Robert J R Elliott & Joanne K Lindley, 2014. "Green Jobs and Growth in the United States: Green Shoots or False Dawn?," Discussion Papers 14-09, Department of Economics, University of Birmingham.
    8. Ianchovichina, Elena & Estache, Antonio & Foucart, Renaud & Garsous, Grégoire & Yepes, Tito, 2013. "Job Creation through Infrastructure Investment in the Middle East and North Africa," World Development, Elsevier, vol. 45(C), pages 209-222.
    9. Alex Bowen, 2012. "�Green� growth, �green� jobs and labour markets," GRI Working Papers 76, Grantham Research Institute on Climate Change and the Environment.
    10. Bowen, Alex, 2012. "'Green'growth,'green'jobs and labor markets," Policy Research Working Paper Series 5990, The World Bank.
    11. Luis Rene Cáceres, 2021. "Causes and Consequences of Idle Youth in Guatemala," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 13(1), pages 1-61, January.
    12. Antonio Estache & Atsushi Iimi, 2012. "Quality or Price? Evidence from ODA-Financed Public Procurement," Public Finance Review, , vol. 40(4), pages 435-469, July.

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    Keywords

    JEL Classification: H41; Transport economics policy and planning; banks and banking reform; non bank financial institutions; debt markets;
    All these keywords.

    JEL classification:

    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

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