Access to electricity – measured by the share of individuals who use electricity as their main energy source – has significantly improved in lower-income countries in recent decades. Thanks to large-scale rural electrification and infrastructure development programmes, 90% of the population in these countries had access by 2021, up from about 74% at the turn of the century.
We found that power outages have had negative effects on employment, as well as working hours and monthly earnings among those who remained employed. Effects on employment have been larger than effects on working hours or earnings. This highlights the threat that load shedding poses to job preservation and job creation efforts.
Load shedding is primarily a consequence of frequent breakdowns at the national utility, Eskom. This is due to a combination of poor long-term planning, a lack of financial resources, rampant state capture and corruption, and aging coal-fired power stations – 80% of which have passed their mid-life point.
Second, in a continuous sense to account for differences in load shedding intensity over time, as measured in MW of unmet demand. On average, periods of load shedding were associated with a 2.6% lower chance of being employed, 1.3% fewer working hours per week , and 1.7% lower real monthly earnings. These are large effects. We did not, however, find evidence of a relationship with hourly wages. This suggests that the monthly earning reductions were driven by fewer working hours.