The impact of rural electrification on female empowerment

Provision of infrastructure plays an important role in economic development. Investment in schools, health, and basic services have been shown to contribute to economic development. In Iran, infrastructure investment, especially in rural areas after the 1979 revolution, is generally credited with rising education and fertility transition, but systematic evidence linking investments in infrastructure to improvement in these outcomes is still rare.

In this paper, we study the impact of the rapid spread of electricity across rural areas during the 1980s and 1990s on female education and fertility, which are the two main correlates of female empowerment and, economic development. Before the revolution only 21% of rural households had access to electricity, by 2006 access had become nearly universal. During these decades total fertility rate in rural areas declined from 8 children per woman to replacement level and female education increased from an average of about 2 years of schooling for 1960's cohort to about 8 years for those born 20 years later. We use village-level data and a difference-in-difference (DID) methodology to measure the impact of electrification on rural fertility and women’s education. We also report instrumental variable estimates in which village elevation is used to control for potential endogeneity in access to electricity.

Our unit of observation is a village. We obtain information on availability of electricity from the censuses of population since 1956 and government sources. Village level fertility, number of children (0-4) per(15-49) woman, and literacy rate, percentage of literate women aged 15-49, are obtained from the censuses of population in 1986 and 1996. Our instrument to control for the endogeneity of electricity placement, elevation, is obtained from the National Cartographic Institute.

Our basic approach is to use the timing of extension of electricity to villages to identify their causal impact on fertility and female education. We first use a DID methodology and compare the rise in literacy and decline in fertility between two census years for two groups of villages, those with and without electricity in 1996. Next, we estimate the impact of the village electricity exposure years on our outcomes using instrumental variables methodology. We take advantages of village elevation to proxy for the relative cost of infrastructure provision to rural areas.

We find that villages which had electricity earlier experienced faster decline in fertility and increase in literacy. Our preliminary conclusion is that electricity extension played an important role in the improvement of rural women's status and rural development.