The long-run effect of public works employment: Evidence from Tunisia

Workfare or public works employment programs have long been prominent in many developing countries. These programs can be a simple and direct strategy to reduce poverty among the poorest households, similar to cash transfers, but the additional requirement for employment can have several positive effects. First, the work requirement may effectively screen out those who have other, higher-return opportunities and thus improve targeting to the poor (Murgai et al. 2016). Second, employment can offer the opportunity for participants to build skills and gain experience and thus positively affect longer-term employment outcomes. Third, public workers can be engaged to construct or maintain local infrastructure, or assets that may have positive externalities (Gehrke et al. 2018).

In practice, however, direct evidence for these second and third channels is relatively weak. Many workfare programs require primarily low-skilled manual labor that is unlikely to result in any skills transfer, and may not have high returns in terms of asset creation (Murgai et al. 2016). Recent reviews of primarily quasi-experimental evidence have suggested that public works programs generally do not seem to boost employability or enhance skills (Gehrke et al. 2018).