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Foreign-assisted infrastructure and local employment: Evidence from China's aid to Africa

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  • An, Jiafu
  • Guo, Shiqi
  • Jiang, Haicheng

Abstract

This study examines the impact of Chinese infrastructure aid on local employment across ten African countries, surveying over 500,000 individuals from 2000 to 2014. Utilizing variations in proximity to aid projects and the timing of project construction relative to local surveys reveals that Chinese aid increases local employment by two percentage points in areas near project sites compared to those awaiting project commencement, contrasting with regions without such aid. Employment rises with the onset of construction, primarily benefiting individuals with lower educational attainment, and persists post-completion, sustained by the migration and employment of skilled workers. Various infrastructure projects temporarily boost local employment, with long-term benefits particularly pronounced for projects in education, healthcare, and water and power utilities. Cross-sectoral and spatial spillover effects are also identified, with results remaining robust after accounting for additional local development factors.

Suggested Citation

  • An, Jiafu & Guo, Shiqi & Jiang, Haicheng, 2025. "Foreign-assisted infrastructure and local employment: Evidence from China's aid to Africa," Journal of Comparative Economics, Elsevier, vol. 53(1), pages 118-138.
    • Handle: RePEc:eee:jcecon:v:53:y:2025:i:1:p:118-138
    DOI: 10.1016/j.jce.2024.11.003
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    More about this item

    Keywords

    Africa; Aid projects; China; Education; Employment; Foreign aid; Infrastructure; Labor; Productivity; Migration;
    All these keywords.

    JEL classification:

    • F35 - International Economics - - International Finance - - - Foreign Aid
    • J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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