| Infrastructure share . | . | Social discount factor . | |||
|---|---|---|---|---|---|
| (%) . | Welfare weight on ex ante poor . | 0.93 . | 0.95 . | 0.97 . | 0.98 . |
| Integrated labour markets | |||||
| 0 | 0 | 2.3 | 4.6 | 9.2 | 13.4 |
| 25 | 3.0 | 5.2 | 9.5 | 13.4 | |
| 50 | 3.4 | 5.4 | 9.2 | 12.5 | |
| 75 | 3.4 | 5.0 | 8.1 | 10.6 | |
| 100 | 3.0 | 4.1 | 6.1 | 7.6 | |
| Segmented labour markets | |||||
| 0 | 0 | 3.8 | 6.7 | 12.3 | 17.3 |
| 25 | 4.3 | 7.0 | 12.1 | 16.6 | |
| 50 | 4.3 | 6.7 | 11.1 | 14.9 | |
| 75 | 4.0 | 5.9 | 9.3 | 12.1 | |
| 100 | 3.4 | 4.6 | 6.7 | 8.3 | |
| 0 | 1 | 5.6 | 9.0 | 15.3 | 20.8 |
| 25 | 6.0 | 9.2 | 14.9 | 19.9 | |
| 50 | 6.1 | 8.8 | 13.7 | 17.9 | |
| 75 | 5.8 | 7.9 | 11.6 | 14.7 | |
| 100 | 5.1 | 6.4 | 8.6 | 10.3 | |
| 0 | 2 | 6.4 | 9.9 | 16.6 | 22.3 |
| 25 | 6.8 | 10.1 | 16.1 | 21.3 | |
| 50 | 6.8 | 9.7 | 14.9 | 19.2 | |
| 75 | 6.5 | 8.8 | 12.7 | 15.8 | |
| 100 | 5.8 | 7.2 | 9.5 | 11.1 | |
| Infrastructure share . | . | Social discount factor . | |||
|---|---|---|---|---|---|
| (%) . | Welfare weight on ex ante poor . | 0.93 . | 0.95 . | 0.97 . | 0.98 . |
| Integrated labour markets | |||||
| 0 | 0 | 2.3 | 4.6 | 9.2 | 13.4 |
| 25 | 3.0 | 5.2 | 9.5 | 13.4 | |
| 50 | 3.4 | 5.4 | 9.2 | 12.5 | |
| 75 | 3.4 | 5.0 | 8.1 | 10.6 | |
| 100 | 3.0 | 4.1 | 6.1 | 7.6 | |
| Segmented labour markets | |||||
| 0 | 0 | 3.8 | 6.7 | 12.3 | 17.3 |
| 25 | 4.3 | 7.0 | 12.1 | 16.6 | |
| 50 | 4.3 | 6.7 | 11.1 | 14.9 | |
| 75 | 4.0 | 5.9 | 9.3 | 12.1 | |
| 100 | 3.4 | 4.6 | 6.7 | 8.3 | |
| 0 | 1 | 5.6 | 9.0 | 15.3 | 20.8 |
| 25 | 6.0 | 9.2 | 14.9 | 19.9 | |
| 50 | 6.1 | 8.8 | 13.7 | 17.9 | |
| 75 | 5.8 | 7.9 | 11.6 | 14.7 | |
| 100 | 5.1 | 6.4 | 8.6 | 10.3 | |
| 0 | 2 | 6.4 | 9.9 | 16.6 | 22.3 |
| 25 | 6.8 | 10.1 | 16.1 | 21.3 | |
| 50 | 6.8 | 9.7 | 14.9 | 19.2 | |
| 75 | 6.5 | 8.8 | 12.7 | 15.8 | |
| 100 | 5.8 | 7.2 | 9.5 | 11.1 | |
Notes: Cell entries report the value of the Social Welfare Function (Equation 19) under alternative characterizations of the labour market for variations in the share of infrastructure in the public investment programme (the rows within each panel), the weight on the welfare of the ‘ex ante’ poor, and the social discount factor (the columns within each panel). The increase in aggregate public investment is common across all experiments at 4% of initial GDP while the relative shares between investment in basic and upper-level education is held constant at two-thirds basic and one-third upper-level. Internal rates of return to public investment are 20% for infrastructure, 12% for basic education, and 10.3% for upper-level education (see text for details). All runs assume the elasticity of substitution in consumption between domestically produced formal goods and imports is high. The shading picks out the maximum value for each column by panel.
Source: Authors’ calculations.
| Infrastructure share . | . | Social discount factor . | |||
|---|---|---|---|---|---|
| (%) . | Welfare weight on ex ante poor . | 0.93 . | 0.95 . | 0.97 . | 0.98 . |
| Integrated labour markets | |||||
| 0 | 0 | 2.3 | 4.6 | 9.2 | 13.4 |
| 25 | 3.0 | 5.2 | 9.5 | 13.4 | |
| 50 | 3.4 | 5.4 | 9.2 | 12.5 | |
| 75 | 3.4 | 5.0 | 8.1 | 10.6 | |
| 100 | 3.0 | 4.1 | 6.1 | 7.6 | |
| Segmented labour markets | |||||
| 0 | 0 | 3.8 | 6.7 | 12.3 | 17.3 |
| 25 | 4.3 | 7.0 | 12.1 | 16.6 | |
| 50 | 4.3 | 6.7 | 11.1 | 14.9 | |
| 75 | 4.0 | 5.9 | 9.3 | 12.1 | |
| 100 | 3.4 | 4.6 | 6.7 | 8.3 | |
| 0 | 1 | 5.6 | 9.0 | 15.3 | 20.8 |
| 25 | 6.0 | 9.2 | 14.9 | 19.9 | |
| 50 | 6.1 | 8.8 | 13.7 | 17.9 | |
| 75 | 5.8 | 7.9 | 11.6 | 14.7 | |
| 100 | 5.1 | 6.4 | 8.6 | 10.3 | |
| 0 | 2 | 6.4 | 9.9 | 16.6 | 22.3 |
| 25 | 6.8 | 10.1 | 16.1 | 21.3 | |
| 50 | 6.8 | 9.7 | 14.9 | 19.2 | |
| 75 | 6.5 | 8.8 | 12.7 | 15.8 | |
| 100 | 5.8 | 7.2 | 9.5 | 11.1 | |
| Infrastructure share . | . | Social discount factor . | |||
|---|---|---|---|---|---|
| (%) . | Welfare weight on ex ante poor . | 0.93 . | 0.95 . | 0.97 . | 0.98 . |
| Integrated labour markets | |||||
| 0 | 0 | 2.3 | 4.6 | 9.2 | 13.4 |
| 25 | 3.0 | 5.2 | 9.5 | 13.4 | |
| 50 | 3.4 | 5.4 | 9.2 | 12.5 | |
| 75 | 3.4 | 5.0 | 8.1 | 10.6 | |
| 100 | 3.0 | 4.1 | 6.1 | 7.6 | |
| Segmented labour markets | |||||
| 0 | 0 | 3.8 | 6.7 | 12.3 | 17.3 |
| 25 | 4.3 | 7.0 | 12.1 | 16.6 | |
| 50 | 4.3 | 6.7 | 11.1 | 14.9 | |
| 75 | 4.0 | 5.9 | 9.3 | 12.1 | |
| 100 | 3.4 | 4.6 | 6.7 | 8.3 | |
| 0 | 1 | 5.6 | 9.0 | 15.3 | 20.8 |
| 25 | 6.0 | 9.2 | 14.9 | 19.9 | |
| 50 | 6.1 | 8.8 | 13.7 | 17.9 | |
| 75 | 5.8 | 7.9 | 11.6 | 14.7 | |
| 100 | 5.1 | 6.4 | 8.6 | 10.3 | |
| 0 | 2 | 6.4 | 9.9 | 16.6 | 22.3 |
| 25 | 6.8 | 10.1 | 16.1 | 21.3 | |
| 50 | 6.8 | 9.7 | 14.9 | 19.2 | |
| 75 | 6.5 | 8.8 | 12.7 | 15.8 | |
| 100 | 5.8 | 7.2 | 9.5 | 11.1 | |
Notes: Cell entries report the value of the Social Welfare Function (Equation 19) under alternative characterizations of the labour market for variations in the share of infrastructure in the public investment programme (the rows within each panel), the weight on the welfare of the ‘ex ante’ poor, and the social discount factor (the columns within each panel). The increase in aggregate public investment is common across all experiments at 4% of initial GDP while the relative shares between investment in basic and upper-level education is held constant at two-thirds basic and one-third upper-level. Internal rates of return to public investment are 20% for infrastructure, 12% for basic education, and 10.3% for upper-level education (see text for details). All runs assume the elasticity of substitution in consumption between domestically produced formal goods and imports is high. The shading picks out the maximum value for each column by panel.
Source: Authors’ calculations.
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