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,In many of these countries, however, electricity supply is often unreliable. Generating capacity is inadequate, there's not enough investment in infrastructure, and energy prices are high.
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.
These outages have become more frequent and severe in recent years. In 2023 - the worst year on record - load shedding was in place for a total ofWe modelled these labour market effects using over 15 years' worth of nationally representative labour force survey data, covering nearly 3 million individuals. We merged this with macroeconomic data and high-frequency electricity data from 2008 to 2023.
We focused on effects on employment, working hours, hourly wages and monthly earnings. We also considered how effects varied across firms of different sizes and in different industries. Low levels of load shedding did not have these associations. But they were markedly worse with higher levels.