Rural Electrification and Changes in Employment Structure in Cambodia

We analyze the effect of electrification on changes in employment structure in Cambodia, which is still in early stage of electrification and structural change. In our analysis, we aim to examine the movement out of agriculture by looking into different categories of nonagricultural employment: nonagricultural self-employment, nonagricultural wage employment and nonagricultural unpaid workers. In order to mitigate the problem of non-random placement of electricity, we use the inverse probability of treatment weighting regression adjustment (IPWRA) method to conduct two different estimations, one with individual-level repeated cross-section data and another with district-level panel data, taking advantage of large and representative sample from the Cambodia General Population Census in 1998 and 2008. We found that the movement out of agriculture is dominated by non-farm self-employment activities. Access to electricity increases nonagricultural self-employment of both men and women by 10-12 percentage points. We also confirm a lack of external effects of electrification in rural Cambodia possibly due to low electrification rates among rural households.