Rural electrification, gender and the labor market: A cross-country study of India and South Africa

This cross-country study estimates the effect of household electrification on labor market outcomes for rural individuals in India and South Africa, two developing countries that have implemented large-scale rural electrification schemes in recent decades. Two identification strategies are used: propensity score matching and panel fixed effects estimation. We focus on three indicators of labor market success: employment, earnings and hours worked. We find that electrification raises the annual incomes earned by those who work in paid employment, for both men and women in both countries. For India, both genders work fewer hours, suggesting that electricity raises productivity. For South Africa, where the labor market has less absorptive capacity, there is no employment benefit of electrification. But women who work benefit the most from the productivity gains of electrification: they have greater increases in earnings than men. Our findings suggest that the benefits of electrification do not accrue universally, but rather depend on gender roles, supporting policies and the labor absorptive capacity of the economy.