Beyond the Grid: The Independent Impact of Electricity Access on Human Development

ABSTRACT Access to modern energy services remains a central pillar of Sustainable Development Goal 7 (SDG 7) and a critical foundation for inclusive and sustainable human development. While previous research has largely examined electrification as a driver of economic growth, its direct and independent contribution to human development beyond income effects is less well understood. Using a global panel dataset from 193 countries for the period 1991–2023, this study investigates the effect of electricity access on the Human Development Index (HDI) after rigorously controlling for economic prosperity, country‐specific structural characteristics, and global time shocks. A two‐way fixed‐effects model with clustered standard errors and a 1‐year lag of electricity access is employed to mitigate confounding and address concerns regarding reverse causality. The results show that lagged electricity access has a positive and statistically significant impact on HDI (β = 0.000576, p < 0.001), even after accounting for log GDP per capita and fixed effects. Robustness checks—including 5‐year averaged data and alternative dependent‐variable models using life expectancy and mean years of schooling—confirm the stability of the findings. These results provide strong empirical evidence that expanding electricity access is not merely a byproduct of economic growth, but an independent and effective development intervention that directly enhances human welfare. The study highlights the importance of prioritizing equitable and sustainable electrification strategies in low‐access regions to accelerate progress toward the SDGs.