Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/298070 
Year of Publication: 
2024
Series/Report no.: 
WIDER Working Paper No. 2024/20
Publisher: 
The United Nations University World Institute for Development Economics Research (UNU-WIDER), Helsinki
Abstract: 
Frequent electricity outages threaten to impede the benefits of expanded access achieved by many developing countries in recent decades. A large literature documents these negative effects, however almost none consider labour market effects. This paper merges labour force survey microdata with high-frequency electricity supply and demand data to provide the first estimates of the relationships between outages and labour market outcomes in South Africa, a country characterized by frequent, severe outages referred to as load shedding. Exploiting temporal variation in outage incidence and intensity, we find that load shedding is associated with significantly lower employment rates, working hours, and earnings on average. Employment appears more sensitive relative to intensive margin outcomes, threatening job creation and preservation efforts. These negative relationships, however, are not evident for low levels of load shedding, but their strength markedly increases with load shedding intensity. We document further heterogeneity by firm size and industry, highlighting the vulnerability of jobs in manufacturing. Overall, our findings suggest that the South African labour market is largely insensitive to relatively low levels of load shedding; however, high levels appear especially costly.
Subjects: 
electricity outages
labour market
developing country
South Africa
load shedding
JEL: 
J21
J23
J31
L94
Persistent Identifier of the first edition: 
ISBN: 
978-92-9267-478-6
Document Type: 
Working Paper

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