The construction industry — led by homebuilding — is a large, often-overlooked source of jobs in emerging market economies, according to a report (https://www.habitat.org/sites/default/files/documents/A-Ladder-Up_Report.pdf) released today by Habitat for Humanity to mark World Habitat Day. Every $1 million in construction output creates an average of 97 jobs in emerging markets, economists at the University of Pennsylvania, the University of Southern California, and the University of Washington found in the report commissioned by Habitat for Humanity’s Terwilliger Center for Innovation in Shelter. That compares to 81 jobs created per $1 million in agricultural output and 96 jobs per $1 million in output in the accommodation and food services sector, according to the report, which focuses on 9 countries: Brazil, Colombia, India, Indonesia, Mexico, Peru, the Philippines, South Africa, and Uganda. Graphics below.
“Investment in residential construction represents a potential win-win-win in emerging markets because it creates such a large number of jobs locally, helps close stubborn gaps in affordable housing and stimulates the larger economy,” said Patrick Kelley, vice president of Habitat’s Terwilliger Center. “These findings are critically important for low- and middle-income countries deciding what areas to prioritize as they work to build back economies weakened by the COVID-19 pandemic, particularly in a world where 1.6 billion people still lack adequate shelter.”
The report, titled “A Ladder Up: The construction sector’s role in creating jobs and rebuilding emerging market economies,” (https://www.habitat.org/sites/default/files/documents/A-Ladder-Up_Report.pdf) also provides evidence that many of those jobs go to workers with lower levels of formal education. These are relatively well-paying jobs compared to other employment options for workers with limited educational attainment, the researchers found.
Construction workers in emerging markets often work outside of formal, regulated channels, according to the report, with informal employment representing 50% of construction workers in South Africa to more than 90% of those workers in countries such as India, Indonesia and Uganda. Residential construction dominates the sector, the report found. In Brazil, Colombia, and Mexico, for example, residential construction accounts for more than 80% of total building construction.
The researchers also concluded that measures to improve the working conditions and on-the-job training of construction workers can help urban areas — including those hit hard by the pandemic — develop in a more sustainable, equitable way.
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About Habitat for Humanity
Driven by the vision that everyone needs a decent place to live, Habitat for Humanity began in 1976 as a grassroots effort on a community farm in southern Georgia. The Christian housing organization has since grown to become a leading global nonprofit working in local communities across all 50 states in the U.S. and in more than 70 countries. Families and individuals in need of a hand up partner with Habitat for Humanity to build or improve a place they can call home. Habitat homeowners help build their own homes alongside volunteers and pay an affordable mortgage. Through financial support, volunteering or adding a voice to support affordable housing, everyone can help families achieve the strength, stability and self-reliance they need to build better lives for themselves. Through shelter, we empower. To learn more, visit habitat.org.
About Habitat’s Terwilliger Center
The Terwilliger Center for Innovation in Shelter, a unit of Habitat for Humanity International, works with housing market actors to expand innovative and client-responsive services, products and financing so that households can improve their shelter more effectively and efficiently. The goal of the Terwilliger Center is to make housing markets work more effectively for people in need of decent, affordable shelter, thereby improving the quality of life for low-income households. To learn more, visit habitat.org/tcis.