Jobs! Electricity Shortages and Unemployment in Africa
This paper presents evidence on how the provision of unreliable electricity constrains expansion in the productive sectors of the economy, consequently leading to a reduction in the number of employment opportunities in Africa. Using geodata on ele...
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World Bank, Washington, DC
2018
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| Online Access: | http://documents.worldbank.org/curated/en/659751524142624281/Jobs-electricity-shortages-and-unemployment-in-Africa http://hdl.handle.net/10986/29717 |
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okr-10986-297172021-06-14T10:08:02Z Jobs! Electricity Shortages and Unemployment in Africa Mensah, Justice Tei ELECTRICITY UNEMPLOYMENT GENDER GAP FEMALE LABOR FORCE PARTICIPATION LABOR MOBILITY BUSINESS ENVIRONMENT MARGINAL PRODUCT OF LABOR ELECTRICITY TRANSMISSION ELECTRICITY ACCESS TOTAL FACTOR PRODUCTIVITY EMPLOYMENT FIRMS PRODUCTIVITY This paper presents evidence on how the provision of unreliable electricity constrains expansion in the productive sectors of the economy, consequently leading to a reduction in the number of employment opportunities in Africa. Using geodata on electricity transmission networks on the continent, the paper computes an index that explores spatial and time variations in technical losses in the electricity network as an instrument for electricity shortages. The instrument is combined with geo-referenced data from the Afrobarometer and Enterprise Surveys from more than 20 African countries to estimate the causal impact of electricity shortages on employment, and the mechanisms driving the impact. Results from the paper reveal that electricity shortages exert a substantial negative impact on employment rates in Africa. The evidence also shows three channels by which electricity shortages affect labor market participation. First, on the extensive margin, electricity shortages constrain the creation of new businesses through their negative effect on entrepreneurship. Second, in the intensive margin, electricity shortages reduce the output and productivity of existing firms, thereby causing them to reduce labor demand. Third, electricity shortages act as a distortion in the business climate, thereby reducing the trade and export competitiveness of African firms. 2018-04-20T18:41:36Z 2018-04-20T18:41:36Z 2018-04 Working Paper http://documents.worldbank.org/curated/en/659751524142624281/Jobs-electricity-shortages-and-unemployment-in-Africa http://hdl.handle.net/10986/29717 English Policy Research Working Paper;No. 8415 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, DC Publications & Research Publications & Research :: Policy Research Working Paper Africa Sub-Saharan Africa |
| repository_type |
Digital Repository |
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Foreign Institution |
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Digital Repositories |
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World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English |
| topic |
ELECTRICITY UNEMPLOYMENT GENDER GAP FEMALE LABOR FORCE PARTICIPATION LABOR MOBILITY BUSINESS ENVIRONMENT MARGINAL PRODUCT OF LABOR ELECTRICITY TRANSMISSION ELECTRICITY ACCESS TOTAL FACTOR PRODUCTIVITY EMPLOYMENT FIRMS PRODUCTIVITY |
| spellingShingle |
ELECTRICITY UNEMPLOYMENT GENDER GAP FEMALE LABOR FORCE PARTICIPATION LABOR MOBILITY BUSINESS ENVIRONMENT MARGINAL PRODUCT OF LABOR ELECTRICITY TRANSMISSION ELECTRICITY ACCESS TOTAL FACTOR PRODUCTIVITY EMPLOYMENT FIRMS PRODUCTIVITY Mensah, Justice Tei Jobs! Electricity Shortages and Unemployment in Africa |
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Africa Sub-Saharan Africa |
| relation |
Policy Research Working Paper;No. 8415 |
| description |
This paper presents evidence on how the
provision of unreliable electricity constrains expansion in
the productive sectors of the economy, consequently leading
to a reduction in the number of employment opportunities in
Africa. Using geodata on electricity transmission networks
on the continent, the paper computes an index that explores
spatial and time variations in technical losses in the
electricity network as an instrument for electricity
shortages. The instrument is combined with geo-referenced
data from the Afrobarometer and Enterprise Surveys from more
than 20 African countries to estimate the causal impact of
electricity shortages on employment, and the mechanisms
driving the impact. Results from the paper reveal that
electricity shortages exert a substantial negative impact on
employment rates in Africa. The evidence also shows three
channels by which electricity shortages affect labor market
participation. First, on the extensive margin, electricity
shortages constrain the creation of new businesses through
their negative effect on entrepreneurship. Second, in the
intensive margin, electricity shortages reduce the output
and productivity of existing firms, thereby causing them to
reduce labor demand. Third, electricity shortages act as a
distortion in the business climate, thereby reducing the
trade and export competitiveness of African firms. |
| format |
Working Paper |
| author |
Mensah, Justice Tei |
| author_facet |
Mensah, Justice Tei |
| author_sort |
Mensah, Justice Tei |
| title |
Jobs! Electricity Shortages and Unemployment in Africa |
| title_short |
Jobs! Electricity Shortages and Unemployment in Africa |
| title_full |
Jobs! Electricity Shortages and Unemployment in Africa |
| title_fullStr |
Jobs! Electricity Shortages and Unemployment in Africa |
| title_full_unstemmed |
Jobs! Electricity Shortages and Unemployment in Africa |
| title_sort |
jobs! electricity shortages and unemployment in africa |
| publisher |
World Bank, Washington, DC |
| publishDate |
2018 |
| url |
http://documents.worldbank.org/curated/en/659751524142624281/Jobs-electricity-shortages-and-unemployment-in-Africa http://hdl.handle.net/10986/29717 |
| _version_ |
1764470078293671936 |