Pathfinding Paper Research Theme 1: Firms, Frictions and Spillovers, and Industrial Policy, Research Theme 2: Labour, Home Production, and Structural Transformation at the Level of the Household, Research Theme 4: Trade and Spatial Frictions

Can Mass Electrification (Still) Cause Structural Change?

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Despite its ubiquity in high income countries among households and in most industries, evidence is mixed for the socioeconomic impacts of electrification in low and middle income countries. Can mass electrification today still induce changes in productivity, labor allocation, and incomes which are associated with structural change, as it seems to have in the past? In this paper we discuss current evidence and directions for future research, with focus on (1) the role of electricity reliability, (2) identifying key investments that are complementary to electrification, and (3) selection, migration, and agglomeration effects when electrification is spatially uneven.

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