Knowledge Note

This study estimates the impact on jobs from power transmission lines constructed by Powerlinks Transmission Limited (PTL), a joint venture company supported by IFC, which helped bring power from a Bhutanese hydropower plant to India. The project had a significant development impact in both India and Bhutan. Unlike most studies that focus on jobs created through construction and operations and maintenance (O&M) (Category 1 jobs) of power projects, this study looks at employment effects more comprehensively by including estimates for second-order growth effects (Category 2 jobs) - i.e. those jobs that are created as the increase in power supply brought by PTL helps firms expand output and hence create more jobs. The study uses a mix of methodologies including Input Output models, econometric time series models and step-by-step estimation to determine the different types of employment effects. It finds that indirect and induced jobs created through an investment in power are much larger than the number of direct jobs created. But the most significant employment effect is from second-order growth (category 2 jobs that were created because the increased power supply relieved a key constraint for firms in India.) The project also had a broader poverty-reduction impact because the transmission lines were constructed through some of the poorest states in India. In addition, a large proportion of induced jobs were in the agricultural sector, creating employment and income for the rural low-skilled population.

About the Presenters

Namita Datta

Govinda Timilsina

Mahima Khanna

Ferran Casadevall Massuet