The importance of electricity for poverty reduction is highlighted in the 7th Sustainable Development Goal: Ensure access to affordable, reliable, sustainable and modern energy for all. Nonetheless, more than 800 million people worldwide did not have access to electricity as of 2018. Tremendous investments have been made to close this gap – over $30 billion per year in 2015 and 2016. So what social outcomes does this type of investment yield?

According to our research, programs to increase access to electricity led to modest gains on education measures and household income. The largest effect was the increase in the time students spent studying at night, while other educational and income measures rose slightly. The interventions also resulted in slightly higher levels of total household income, lower levels of household poverty, and higher levels of business productivity. All these effects were statistically significant but small, except for the change in night study time, which was larger.

Our review combined the results from 126 impact evaluation studies published since 2004, which provided stronger evidence than an individual evaluation, where results can be driven by one-off factors. Most of the interventions in the review were expansions of electric grids into rural or peri-urban areas, while a few evaluated smaller-scale, off-grid interventions to expand access.

In general, the quality and reliability of electricity service varied widely across the studies, before and after the interventions – but each intervention represented an expansion of electricity access.

The review notes that one key mechanism by which electrification increases incomes is by reducing the time women spend on housework, allowing them to earn other income. However, in some places this mechanism was blocked by gender norms against women working outside the home.

Our findings highlight the need for improvements in the way these projects are developed and evaluated.

In addition to modest effects, the review also found considerable variation across studies that resulted partly from study design, the way variables were measured, location, or length of follow-up after interventions took place. Understanding how context influences the use of electricity infrastructure is key. Without appropriately considering these factors, individuals may not alter their routines to use the new infrastructure.

Our findings highlight the need for improvements in the way these projects are developed and evaluated. This includes more funding for rigorous research to fill evidence gaps; adjustments to the expectations for the magnitude of project outcomes; and interventions targeting multiple constraints, such as availability, reliability, and affordability. New research should focus on understanding the effect of demand-side interventions, conducting theory-based mixed-method evaluations, and measuring outcomes related to quality of life and social experience.

There are significant challenges that prevent universal access to electricity, including high investment and operation costs; limited demand given market conditions; implementation and maintenance issues; and regulatory or political issues. Even with expanded access, other factors like connection quality and unequal access may have limited the development impacts.

Effective evaluation and further study is needed. Understanding what works and does not is crucial for policy planning and decision-making.