Ruhr Economic Papers

Ruhr Economic Papers #864

Fracking, Farmers, and Rural Electrification in India

by T. Robert Fetter and Faraz Usmani

RWI, 09/2020, 64 S./p., 10 Euro, ISBN 978-3-96973-001-0 DOI: 10.4419/96973001



The shale gas revolution in the United States induced an unprecedented commodity boom across
northwestern India. Leveraging population-based discontinuities in the contemporaneous roll-out of India’s national rural electrification scheme, we show that access to electricity increased total employment and nonagricultural employment in villages affected by this exogenous economic shock, but had no impact on labor markets elsewhere. This combination of two natural experiments highlights how complementary economic conditions drive heterogeneity in the labor-market impacts of rural electrification. It also helps explain the large variation in the reported impacts of such resource-intensive infrastructure investments globally.

JEL-Classification: H54, O13, O15, O18

Keywords: Rural electrification; heterogeneous impacts; labor markets; productive use; economic development; regression discontinuity; India