Induced Jobs

At a Glance
  • Induced jobs are created when employees in the extractive industry value chain use their earnings to purchase local goods and services. While it is difficult for either governments or companies to directly influence and promote induced employment, broad steps can be taken to ensure more money is spent locally.

  • For example, governments can work to improve the overall economic environment so businesses that offer goods and services consumed by employees within the value chain can operate competitively.

  • Social and physical infrastructure plays a key role in affecting how employees in the extractive industry value chain consume goods and services. It can also provide incentives for employees to settle in areas close to project sites and increase local demand for commercial goods and services.

Case Studies

Key Resources

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African Mining, Gender, and Local Employment

This paper analyzes the impact of large-scale mining projects on women’s labor market participation. Through this study, 109 mine ...

Topic Briefing

Unlike direct and indirect employment, induced employment is difficult to influence and promote directly, whether for governments or extractive companies. But, since induced jobs are created when employees in the extractive industry value chain use their earnings to purchase local goods and services, broad steps can be taken to help ensure that more money is spent locally.

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Governments can, for example, improve the overall economic environment so that the businesses that offer goods and services consumed by employees in the extractive industry value chain can operate competitively. The World Bank’s reports are a useful source for governments to gauge how conducive their policies are to business creation and smooth operation.

Infrastructure also plays a key role in affecting how employees in the extractive industry value chain consume goods and services. For example, the same roads that are needed by an extractive company may also allow local farmers to bring their produce to markets and to benefit from increased demand resulting from the company’s activities. Governments can also support induced employment creation by providing social infrastructure such as schools or health services, possibly in cooperation with companies. Such infrastructure provides incentives to extractive industry employees to settle in the area close to the site and thus spurs local demand for commercial goods and services. For more information on how governments can work with extractive companies in this vein, see the Shared Use of Extractives Infrastructure and Resource Corridors section.