Abstract
The input-output (IO) method—a classic approach of macroeconomic modelling—is widely used to assess the employment impact of investments and is an important part of the monitoring and evaluation frameworks of bilateral and multilateral development banks and international financial institutions. There are a variety of IO techniques used by different organizations, ranging from Leontief multipliers to the computable general equilibrium (CGE) type of models that are able to incorporate more realistic constraints prevalent in an economy (such as limited production capacity and price effects) and to capture long-term employment effects. The purpose of this paper is to provide an overview of the modelling tools available, describing their methodologies and underlying assumptions.International organizations should play a leading role in promoting common definitions, common data, and common practices to ensure that the analyses carried out by various institutions and implementers are broadly comparable, thereby enhancing the credibility and usability of Employment Impact Assessments.