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Jobs! Electricity shortages and unemployment in Africa

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  • Mensah, Justice Tei

Abstract

To what extent does unreliable electricity provision pervasive in many African countries affect job creation in the region? I address this question by assembling household and firm-level data from 29 African countries along with unique project-level data on foreign direct investment (FDI). Leveraging several quasi-experimental approaches, I find that outages have a non-trivial negative impact on employment. The effect is driven by a reduction in employment in non-agricultural sectors and skilled jobs. Unskilled jobs are unaffected by electricity outages. The negative effect of outages on firm entry and the performance of incumbent firms are plausible channels.

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  • Mensah, Justice Tei, 2024. "Jobs! Electricity shortages and unemployment in Africa," Journal of Development Economics, Elsevier, vol. 167(C).
    • Handle: RePEc:eee:deveco:v:167:y:2024:i:c:s0304387823001876
    DOI: 10.1016/j.jdeveco.2023.103231
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    More about this item

    Keywords

    Electricity outages; Jobs; Employment; Firms; FDI; Africa;
    All these keywords.

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa

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