The employment effect of mine employees’ local expenditure

Abstract

The article discusses the employment effects at the sub-national level of large-scale mining projects. It argues that the effect of employees’ expenditure is at least as important as production linkages to employment and at least potentially as important to diversification and economic development. It reviews some of the practical difficulties in estimating employment effects of this kind and uses three practical examples, from Chile, the Democratic Republic of Congo and Zambia, to illustrate both the challenge of estimating employment effects from employee spending and the magnitude of the effects themselves. Finally, the reasons for the relative neglect of the issue are discussed, as well as the implications for policy formulation.