INCOME AND
EMPLOYMENT FROM SERVICES
Introduction
The current trend towards a more urbanised global population is accompanied by an increase in
the size and number of urban slums. Slums are growing at similar rates to cities in most parts of
the developing world (UN-Habitat, 2006: 11) and urban authorities are unable to keep pace with
provision of basic infrastructure services1 in these areas. With the constant threat of eviction due
to insecurity of land tenure in ‘illegal’ settlements, residents may be reluctant to invest their own
money into improving services for themselves and may find services offered by governments or the
private sector unaffordable. The provision of affordable, improved basic infrastructure services in
slums typically brings many benefits, including health and an improved local environment.
Among other benefits are opportunities for employment and income generation. Such
opportunities may come as a result of improved access to services for slum dwellers as well the
involvement of the poor in systems of service provision - from construction of infrastructure
through to its operation, maintenance and management. Maximising the urban poor’s share of
this income and employment from services not only magnifies the positive impact of
infrastructure interventions but also has important implications for poverty reduction.
Agencies and organisations have adopted a variety of approaches in their implementation of
infrastructure projects in slums. These range from conventional, ‘top-down’ provision (designed
to increase coverage levels and implemented by external contractors and engineers with little or
no participation by residents) to community-managed models (typified by greater resident
participation in the construction and/or ongoing operation and maintenance (O&M) of the
infrastructure services). Practical Action’s approach to urban infrastructure service provision
seeks to improve the living environment of the poor through better access to services. In addition,
it looks for ways in which the infrastructure can provide employment and income-generating
opportunities for the poor as users and providers of services. By placing improvements to the
livelihoods of the poor as a key objective, Practical Action feels that the sustainability of
infrastructure services may be promoted without jeopardising pre-existing informal or small
private systems of service provision. These systems are often owned by the poor and provide
important livelihoods for them.
This technical brief is based upon research carried out in Bangladesh looking at Practical Action’s
urban services programme. It is intended for project staff and other practitioners who work on
services and infrastructure provision for the urban poor. It looks first at the main mechanisms by
which these income and employment benefits may be realised by slum dwellers. Secondly, the
ways in which they can accrue at the different phases of infrastructure service provision are
discussed. Finally, we consider the need to look beyond the physical boundary of the affected
slums, recognising the important role that service providers from the wider urban poor have to
play in constructing, operating, maintaining and managing infrastructure services in slums.
Infrastructure and services produce income benefits for the poor
Opportunities for income and employment arising from improvements to infrastructure services
may be seen as coming about through the following three mechanisms:
1. Direct income benefits
Direct income benefits are those realised by the poor as they operate as providers of services.
Income gains may be enjoyed by existing informal or private providers of services, as demand for
1 The basic infrastructure services considered in this technical brief are water supply, sanitation (excreta disposal), solid
waste collection, street/walkway paving and drainage.
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