Working Paper: CEPR ID: DP16691
Authors: Simon Franklin; Clément Imbert; Girum Abebe; Carolina Mejiamantilla
Abstract: This paper evaluates Ethiopia's Urban Productive Safety Net Program, which provides employment on local public works to the urban poor, and was rolled out randomly across neighborhoods of Addis Ababa. We find that the program increased public employment and reduced private labor supply among beneficiaries. We also show that it improved local amenities in treated locations, for both beneficiary and non-beneficiaries. We then develop a spatial equilibrium model and leverage unique data on commuting flows to quantify the effect of exposure to changes in labor supply from treated locations on labor markets across the city. Our estimates imply that once fully rolled out the program increased private wages by 18.6%. Finally, we use the model to compute the welfare gains to the poor: when we include the indirect effects on private wages and local amenities the welfare gains are four times larger than the direct benefits from public employment alone.
Keywords: urban public works; Ethiopia; labor market; welfare gains; amenities
JEL Codes: I38; J61; O18; R23
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| UPNSP (L32) | public employment (J68) |
| UPNSP (L32) | private labor supply (J29) |
| public employment (J68) | total hours worked (J22) |
| UPNSP (L32) | local amenities (R53) |
| UPNSP (L32) | private sector wages (J39) |
| direct benefits from public employment (J68) | indirect welfare gains to urban poor (H53) |