Development Effects of Rural Electrification

Jan 2017
What do we know about the effects of improved access to electricity? Does the research tell a unified story? To answer these questions, this brief examines 50 impact evaluation studies, focusing on the effects of electrification on education, labor, and income indicators. Overall, the literature finds substantial welfare gains, which tend to be greatest for women and small firms. On average, electrification leads increases of around 7% in school enrollment, 25% in employment, and 30% in incomes. However, the estimates vary widely, with many studies finding no effects, indicating weak links in the empirical literature. This review suggests that addressing the sources of such variance could be a means to fill the persistent knowledge gaps and to improve the effectiveness of electrification policies.