Does electrification drive development?

In India and other developing countries, access to electricity is considered a critical step towards development. But according to a new study, electrification alone does not boost economic outcomes, and its effects can vary even within regions.

In the study, Kenneth Lee and others highlight that identifying the economic gains from electricity is tricky because there are other factors, such as income and education, which affect both access to electricity and economic outcomes. They also show that existing research has found that electricity can have mixed effects on important economic outcomes. For instance, in a few countries, access to electricity has had positive large effects on female labour supply and increased educational attainment among children while in other countries electricity has had little effect on these outcomes.