This paper investigates the income and educational impacts of a large village-based electrificationprogram in rural Bhutan. We designed and administered a household and village-level socio-economicsurvey in the electrified and non-electrified villages and collected data on wide range of developmentaloutcomes. Using Propensity Score Matching (PSM) and propensity-based weighted regression, wefind that access to electricity improved economic and educational outcomes. While access to electricityincreased non-farm income by 60-70%, and it had no significant effect on farm-income. Since non-farm income consists of a small percentage of total household income, the impact should be consideredmodest and not large. We also nd that children in electrified households have 0.75 additional yearsof schooling, an increase of about 24%. Additionally, amount of evening study time at home is 10minutes more for the children in the treated households compared to untreated households. Weemployed different matching algorithms and our results are consistent and robust to all matchingestimator. Our study contributes to the few studies on infrastructure literature which has oftenbeen focused on transport, telecom, and water projects. Given the limited use of electricity forincome-generating activities in Bhutan, investments in other complementary infrastructure, such as,markets, roads, information technology, credit may help the households to realize the full benefits ofelectrification.
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