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Urban Public Works in Spatial Equilibrium: Experimental Evidence from Ethiopia

Author

Listed:
  • Simon Franklin
  • Clément Imbert
  • Girum Abebe
  • Carolina Mejia-Mantilla

Abstract

This paper evaluates a large urban public works program randomly rolled out across neighborhoods of Addis Ababa, Ethiopia. We find the program increased public employment and reduced private labor supply among beneficiaries and improved local amenities in treated locations. We then combine a spatial equilibrium model and unique commuting data to estimate the spillover effects of the program on private sector wages across neighborhoods: under full program rollout, wages increased by 18.6 percent. Using our model, we show that welfare gains to the poor are six times larger when we include the indirect effects on private wages and local amenities.

Suggested Citation

  • Simon Franklin & Clément Imbert & Girum Abebe & Carolina Mejia-Mantilla, 2024. "Urban Public Works in Spatial Equilibrium: Experimental Evidence from Ethiopia," American Economic Review, American Economic Association, vol. 114(5), pages 1382-1414, May.
    • Handle: RePEc:aea:aecrev:v:114:y:2024:i:5:p:1382-1414
    DOI: 10.1257/aer.20220471

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    Cited by:

    1. Simon Franklin, 2025. "The Demand for and Impacts of Government Housing: Evidence from Ethiopian Lotteries," Working Papers 986, Queen Mary University of London, School of Economics and Finance.
    2. Premand, Patrick & Schnitzer, Pascale, 2025. "Impacts and Spillovers of a Low-Cost Multifaceted Economic Inclusion Program in Chad," Policy Research Working Paper Series 11084, The World Bank.
    3. Sarthak Joshi, 2025. "Spatial Shocks and Gender Employment Gaps," Edinburgh School of Economics Discussion Paper Series 323, Edinburgh School of Economics, University of Edinburgh.
    4. Timilsina, Govinda R. & Sebsibie, Samuel, 2025. "How can a carbon tax be designed to benefit the poor? An investigation for Ethiopia," Renewable and Sustainable Energy Reviews, Elsevier, vol. 213(C).
    5. Cecilia POGGI & Emmanuel Ramaholimihaso, 2024. "Energy and social protection measures for energy poverty," Working Paper a6ce163e-9e52-4758-b514-7, Agence française de développement.

    More about this item

    JEL classification:

    • H76 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Other Expenditure Categories
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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