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Short- and Long-Run Impacts of Rural Electrification: Evidence from the Historical Rollout of the U.S. Power Grid

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  • Lewis, Joshua

    (University of Montreal)

  • Severnini, Edson R.

    (Carnegie Mellon University)

Abstract

Electrification among American farm households increased from less than 10 percent to nearly 100 percent over a three decade span, 1930{1960. We exploit the historical rollout of the U.S. power grid to study the short- and long-run impacts of rural electrification on local economies. In the short run, rural electrification led to increases in agricultural employment, rural farm population, and rural property values, but there was little impact on the local non-agriculture economy. Benefits exceeded historical costs, even in rural areas with low population density. As for the long run, rural counties that gained early access to electricity experienced increased economic growth that persisted for decades after the country was fully electrified. In remote rural areas, local development was driven by a long-run expansion in the agricultural sector, while in rural counties near metropolitan areas, long-run population growth coincided with increases in housing costs and decreases in agricultural employment. This last result suggests that rural electrification stimulated suburban expansion.

Suggested Citation

  • Lewis, Joshua & Severnini, Edson R., 2017. "Short- and Long-Run Impacts of Rural Electrification: Evidence from the Historical Rollout of the U.S. Power Grid," IZA Discussion Papers 11243, Institute of Labor Economics (IZA).
  • Handle: RePEc:iza:izadps:dp11243
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    Cited by:

    1. Enflo, Kerstin & Karlsson, Tobias & Molinder, Jakob, 2019. "More Power to the People: Electricity Adoption, Technological Change and Social Conflict," CEPR Discussion Papers 13986, C.E.P.R. Discussion Papers.
    2. Daniela Vidart, 2021. "Human Capital, Female Employment, and Electricity: Evidence from the Early 20th Century United States," Working papers 2021-08, University of Connecticut, Department of Economics.
    3. Gaggl, Paul & Gray, Rowena & Marinescu, Ioana & Morin, Miguel, 2021. "Does electricity drive structural transformation? Evidence from the United States," Labour Economics, Elsevier, vol. 68(C).
    4. Sergio Petralia, 2020. "GPTs and Growth: Evidence on the Technological Adoption of Electrical & Electronic Technologies in the 1920s," Papers in Evolutionary Economic Geography (PEEG) 2033, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Aug 2020.
    5. Robin Burgess & Michael Greenstone & Nicholas Ryan & Anant Sudarshan, 2020. "Demand for Electricity on the Global Electrification Frontier," Cowles Foundation Discussion Papers 2222, Cowles Foundation for Research in Economics, Yale University.
    6. Perera, Pradeep & Sarker, Tapan & Islam, K. M. Nazmul & Belaïd, Fateh & Taghizadeh-Hesary, Farhad, 2021. "How Precious Is the Reliability of the Residential Electricity Service in Developing Economies? Evidence from India," ADBI Working Papers 1211, Asian Development Bank Institute.
    7. Hao, Shiming, 2021. "True structure change, spurious treatment effect? A novel approach to disentangle treatment effects from structure changes," MPRA Paper 108679, University Library of Munich, Germany.
    8. World Bank Group, 2018. "Africa's Pulse, No. 17, April 2018," World Bank Other Operational Studies, The World Bank, number 29667, September.
    9. Perez Sebastian,Fidel & Steinbuks,Jevgenijs & Feres,Jose Gustavo & Trotter,Ian Michael, 2020. "Electricity Access and Structural Transformation : Evidence from Brazil's Electrification," Policy Research Working Paper Series 9182, The World Bank.

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    More about this item

    Keywords

    rural electrification; short run; long run; agriculture; suburbanization;
    All these keywords.

    JEL classification:

    • N72 - Economic History - - Economic History: Transport, International and Domestic Trade, Energy, and Other Services - - - U.S.; Canada: 1913-
    • N92 - Economic History - - Regional and Urban History - - - U.S.; Canada: 1913-
    • N32 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy - - - U.S.; Canada: 1913-
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy

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