Fact Service February 2023

Study finds benefits of public investment outweigh costs

A study carried out by researchers at the University of Greenwich has found that extra investment in care, the green economy, and infrastructure would reap rewards in employment and economic growth that exceed the initial investment.Sponsored by the ITUC (International Trade Union Confederation), the research looked at eight countries and what effect a repeated annual increase in public spending of 1% of GDP within the three sectors would yield.The researchers believe that: investing an extra 1% of GDP in the care economy over five years would yield an average GDP increase of more than 11%, as well as a 6.3% increase in total employment levels;an extra 1% of GDP investment in the green economy over five years would deliver an average GDP increase of 10%, as well as a 7.5% increase in employment; andan extra 1% of GDP on infrastructure investment over five years would increase both employment and GDP levels by 12%. “The lingering employment effects of Covid-19, as well as a rapidly changing world of work, have underscored the urgency of addressing employment deficits and inequalities,” ITUC deputy general secretary Owen Tudor, explained.“Governments must step up their investments to support the creation of quality jobs – especially in strategic sectors that are good for both people and the planet, including care, infrastructure and the green economy,” he concluded.https://www.ituc-csi.org/The-employment-effects-of-public-spending