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Electrification, Power Outages and Employment

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  • Josephine Ofori Adofo

Abstract

Although electrification rates have increased in developing countries, the poor quality of electricity still remains a challenge. This paper studies the effects of electrification at the intensive margin, using a fixed effects approach. I find that power outages significantly reduce employment, earnings, and hours of work. A key channel through which outages affect employment is decreased prevalence of small and medium enterprises (SMEs) among households. Evidence indicates that severe outages reduce opportunities for households to indulge in income generating activities. The decrease in employment opportunities is further exacerbated by reduced industrial growth and changes in the industrial composition. The results suggest that unreliable electricity may have a negative implication for job creation in developing countries.

Suggested Citation

  • Josephine Ofori Adofo, 2020. "Electrification, Power Outages and Employment," Applied Economics and Finance, Redfame publishing, vol. 7(4), pages 147-159, July.
    • Handle: RePEc:rfa:aefjnl:v:7:y:2020:i:4:p:147-159
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    References listed on IDEAS

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    More about this item

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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