Energy poverty and employment quality: Insights from Africa

As the 2030 sustainable development era approaches expiration, energy poverty has remained a scourge for many African countries. At the same time, the labour market of the continent is still less resilient, with rising job vulnerability and high informality. This paper aims to analyse the impact of energy poverty on employment quality in Africa, covering 2000–2021 period. Energy poverty is captured using an index constructed through the principal components approach. The methodology is based on applying the Driscoll-Kraay fixed effects standard errors, IV GMM, and mediation analysis. Results show that energy poverty is significantly linked to poor employment quality by increasing vulnerable jobs as well as the working poverty rate in Africa. These findings remained consistent after addressing cross-sectional dependence and endogeneity issues. Further estimates from the causal mediation analysis revealed that human capital and industrialisation are potential channels through which energy poverty influences the African labour market. Therefore, putting an end to energy poverty is more than ever before an imperative policy option for decent jobs and achieving sustainable development in Africa.