Large-Scale Electrification, Schooling, and Labour Market Transitions: The Complementary Role of Improved Roads

This paper examines the causal impacts of recent large-scale electrification in Ethiopia on schooling and labour market transitions – the critical components of human capital formation and structural changes. It provides a comprehensive assessment of the impact of electrification by jointly considering the direct effects (household electricity access), village-level spill-overs (community-wide electrification) and intensive margin effects (hours of electricity supply). The paper goes beyond assessing electrification as an isolated intervention by examining how better road access complements its effects. Using rich panel survey and doubly robust difference-in-difference estimators with both binary and continuous treatment settings, we find that electrification significantly increases years of completed schooling and facilitates labour transitions from agriculture towards non-farm activities. The electricity-induced benefits are notably pronounced in areas with better road access and grid reliability, highlighting the importance of complementary infrastructure and service quality in maximising the observed gains. Electrification also promotes girls’ schooling outcomes and reduces women’s time poverty, indicating its crucial role in promoting gender equality. Overall, the findings underscore the critical role of coordinated infrastructure investments and reliable electricity provision in amplifying the returns to electrification.