Short-run effects of grid electricity access on rural non-farm entrepreneurship and employment in Ethiopia and Nigeria

Abstract

Empirical evaluation of the household-level economic effects of electricity access in rural regions has challenged researchers due to data scarcity issues and identification challenges. Previous studies provide mixed evidence depending on the context and the empirical approach adopted. Continued efforts towards a robust understanding of this linkage are necessary for guiding the design of rural electricity access and economic development policies. Here we carry out a difference-in-differences analysis with staggered treatment timing, revisiting prior work reporting short-run effects of rural electrification on household non-farm entrepreneurship and employment trends in Ethiopia and Nigeria between 2010–2015. Our results indicate that rural electrification considered alone was insufficient to trigger shifts in non-farm entrepreneurship and non-farm household employment outcomes in the 2–4 years following grid connection in either country. We do find some evidence in Nigeria of farm employment intensification over this short-term. Our work contributes to improving the understanding of the causal pathway in question while also highlighting the limitations of short-term survey datasets in pursuing this goal.