# **1 Introduction**

Both roads and electricity play central roles in economic development, yet evidence about whether their expansion is a potential driver of job creation is limited and mixed. Moreover, little is known about the complementary effects that such investments may confer in combination, or the constraints on potential benefits of one kind of infrastructure because of the absence or inadequacy of the other type. For example, greater access to electricity can stimulate local production, but a lack of reliable transport infrastructure can reduce the potential gains due to lack of market access, especially in more isolated areas. On the other hand, greater connections to road networks can increase market access, allowing for better access to customers, but also greater exposure to competition; without access to modern production technology that electricity enables, the competition effect from improved road access may outweigh the benefits of reaching more potential customers, potentially stymieing local economic growth. Empirical evidence on the complementarity between roads and electricity is limited (Moneke, 2020). Most existing studies either analyze the effects of infrastructure investments in isolation, or estimate the aggregate impact of infrastructure in a bundle of many types of infrastructure, calculating the elasticity of output with respect to a synthetic infrastructure index that includes electricity, transport, and telecommunications (Calderon et al., 2015). Thus, questions remain about whether a big push for investments in roads and electricity represents a powerful means of creating more and better jobs.

This paper investigates how infrastructure investments can be coordinated to support economic development by looking at the combined, causal effect of electricity and road expansion on employment in sub-Saharan Africa. The analysis relies on two sets of geo-referenced household survey data: the Living Standards Measurement Study (LSMS) surveys and Demographic and Health Surveys (DHS). We combine these with an extensive array of data on the geo-location of road expansions (Jedwab and Storeygard, 2021) and electric grids in 27 African countries.

The high costs and potentially large benefits of infrastructure investments mean that the placement of electrification projects and new roads typically correlates with both economic and political characteristics of locations (Blimpo et al., 2013; Burgess and Donaldson, 2017; Okoye et al., 2019; Selod and Soumahoro, 2019). To address the potential endogeneity of infrastructure investment, we use two identification strategies: a baseline regression strategy and an instrumental variable (IV) approach. In the baseline model, we control for country and year fixed effects and a wide range of individual and local factors. In the IV model, we instrument electrification with topography data (Dinkelman, 2011) and the density of lightning strikes, which are a key source of damage to electricity lines and a source of disruption in service, particularly in Africa (Manacorda and Tesei, 2020).

We propose a new instrumental variable for the proximity to the road network, inspired by postindependence leaders’ idea of constructing roads to govern the entire expanse of their countries from the capital city - the center of political power - and to promote ethnic and regional integration and nation building. One of the main goals of African leaders as their countries’ gained independence was to extend the exercise of their authority over all locations. In the wake of the arbitrary partition of Africa over 1884 and 1885, African leaders also sought to integrate different ethnic groups and regions into their countries (Herbst, 2014; Deng, 1997). One way to achieve both policy goals was to construct roads to both 2