Reshaping public works for more sustained impact

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Public works programs (PWPs) are widely used in low- and middle-income countries as a key social protection and employment policy tool. These programs provide temporary work opportunities to vulnerable populations, often linked to infrastructure development or public goods. However, a critical question remains: Do they generate sustained economic benefits for participants after the program ends?
 

Meta-Analysis Insights

Our recent meta-analysis of experimental studies from 11 PWPs across nine countries—Comoros, Côte d’Ivoire, Democratic Republic of Congo (DRC), Djibouti, Egypt, Ethiopia, Lao PDR, Sierra Leone, and Tunisia— provides new insights into the short- and medium-term impacts of these programs. It assesses how PWPs influence employment, earnings, savings, women’s empowerment, psychological well-being, and discusses externalities on market wages or the environment.
 

Substantial Short-Term Gains in Employment and Earnings

Evidence suggests that PWPs significantly improve participants’ employment and earnings while they are enrolled in the program. On average, the share of individuals who are employed increases by 25 percentage points. These positive effects are particularly pronounced in settings with lower baseline employment rates or for groups with lower labor force participation such as women and youth.
 

Figure 1. Impact of PWPs on Earnings in the Short & Medium Run

Similarly, earnings show a substantial boost. Participants’ monthly earnings increase by an average of $49 during the program, compared to a control group average of $75. This represents a 48% increase in income. These immediate economic benefits highlight the role of PWPs in providing financial support, especially in contexts where alternative employment opportunities are limited.
 

The Challenge of Sustaining Gains

Despite the positive short-term impact, the benefits of PWPs largely dissipate after participants exit the program. In the medium run, employment gains drop to just 3.8 percentage points, and the average increase in earnings is only $6.40 per month—a mere 6% rise. Moreover, impacts dissipate with length of time since program completion.

However, there are some exceptions. Sustained earnings improvements are observed in cases where participants used their PWP income to save or invest in productive assets or business activities. For instance, in Côte d’Ivoire and Tunisia, participants who saved or started small enterprises experienced longer-lasting economic benefits.
 

Forgone Earnings and Cost-Effectiveness

A critical issue in assessing the effectiveness of PWPs is forgone earnings. Many participants forgo other income generating activities, such as existing informal jobs or self-employment opportunities to join the program, which diminishes the net impact on their overall income. On average, impacts on earnings from PWPs are 46 percent of maximum potential program transfers, meaning that, for 1 USD transferred, impacts on earnings are 0.46 USD.

This raises concerns about cost-effectiveness, as net earnings gains for participants tend to be smaller than program costs. To maximize economic benefits, better targeting is needed. Prioritizing individuals with lower forgone earnings—such as those who are unemployed or out of the labor force rather than those shifting from another job—could increase net gains. Additionally, program designs could be adjusted to minimize work displacement effects by offering more flexible participation models that allow individuals to combine public works with other income-generating activities.
 

Beyond Economic Benefits: Women’s Empowerment and Psychological Well-Being

Beyond economic outcomes, there is some evidence of improvements in women’s empowerment and psychological well-being, but these are not systematic. The meta-analysis finds increased economic engagement or autonomy/control over resources for women in three of the seven studies that measure this (Egypt, Tunisia, and Lao PDR).

Improvements in psychological well-being were observed in three of the eight studies. In Tunisia, Egypt, and Côte d’Ivoire, participants reported lower levels of depression, distressing thoughts, or irritability. These findings highlight the potential of broader social benefits of PWPs.

This is an area of active policy and research. For example, a multi-country study by WFP and DIME shows that women's participation in public works increases their control over household resources, and initial backlash from men turned into greater appreciation for their autonomy three months after program ended. However, these gains in women's economic empowerment do not translate into persistent increases in women's earnings. Another study from Djibouti found that short-term PWP for pregnant women and mothers led to temporary gains in earnings, saving, and spending, but most women left the labor force afterward.
 

Externalities on Market Wages and the Environment

PWPs can influence labor markets beyond direct beneficiaries. In some contexts, PWPs improve market wages. India’s National Rural Employment Guarantee Scheme (NREGS) increased agricultural wages by 4.3% annually across 18 states without displacing private-sector employment. Similar wage effects are observed in Ethiopia’s large-scale urban PWP program.

PWPs can also have broader environmental effects. A recent paper from India found that NREGS-funded surface water infrastructure raised groundwater levels and increased dry-season irrigation, including for high-value crops. Results from the WFP-DIME climate and resilience window also show that PWPs with complementary interventions can enhance agricultural productivity.

These findings suggest that PWPs can have broader economic or environmental benefits beyond direct employment and earnings gains.
 

The Way Forward: Strengthening PWPs for More Lasting Impact

PWPs remain popular in much of the world. Our meta-analysis confirms their effectiveness in meeting their immediate goals—but also underscores their limited impact on participants’ economic outcomes after the programs end. The evidence from the studies featured and our review & accompanying podcast provide  insight for policymakers and program managers faced with tackling increasingly complex challenges, often with decreasing resources. A key takeaway is that programs must be explicitly designed to generate externalities to become cost-effective, and these need to be carefully measured. This includes rigorously considering and quantifying the value of assets, public goods or amenities created, as well as environmental or general equilibrium effects, such as those on local wages.