Impact of Development Projects on Jobs' Creation in Afghanistan (2016 – 2019)

Abstract

Unemployment is one of the main critical issues in Afghanistan. It has led the country's poverty rates to increase significantly. Within a country's socioeconomic improvement, development projects are of crucial significance. As Afghanistan is still one of the developing countries with a high level of poverty and unemployment, the implementation of development projects, on the one hand, could lead to an increase in infrastructure (both soft and hard infrastructures) development of Afghanistan. On the other hand, it can raise the living standards of the country's citizens (especially in rural areas). As per the literature reviews and theoretical framework, numerous researches suggest that development projects significantly affect employment in different developing countries. Hence, the research is designed to study the impact of development projects on job creation and employment opportunities in Afghanistan over four years of panel data research techniques (2016–2019) using the ordered logit/probit and fixed effect estimation approaches. The Asia Foundation's dataset, which comprises 55,494 observations over four years (2016-2019), is the study's main data source. For studying the topic, eight main and most frequent types of development projects (construction, agriculture, irrigation, healthcare, electricity, government school, drinking water, and new factories' opening) have been considered, and the effect of each of these development projects on job creation and employment prospects in Afghanistan is assessed and analyzed. As a result, all eight types of development projects are statistically significant and positively impacted job creation and growth in employment opportunities. Likewise, a comparative analysis of these development projects' impact on employment opportunities is carried out to understand better which of them have higher effects than the others. Besides development projects, other main socioeconomic factors (such as good living conditions, well personal safety, low level of corruption, access to the internet, increase in households' income, higher education, and Afghans' optimism about their country's direction) on enhancing job opportunities in Afghanistan are also assessed and analyzed throughout the study, which leads to improvement in employment opportunities in the country. Thus, in light of the literature analysis and theoretical and empirical context of the study, it has been considered a successful way to increase employment opportunities and the economic situation of people in Afghanistan by initiating and implementing development projects.