PhD Seminar (Economics)
Crawford School of Public Policy | Arndt-Corden Department of Economics
Indonesia is struggling to provide reliable electricity supply in some regions. This paper estimates the impact of electricity blackouts on the productivity of Indonesia’s small-sized manufacturing enterprises. A pseudo-panel dataset covering the period 2004–2015 is employed. The estimates suggest that a one-percent increase in blackout frequency is associated with a 0.1 per cent reduction in labour productivity. In total, blackouts cause a cost of around IDR109 billion per year for Indonesia’s small-sized manufacturing enterprises. A discussion of the role of the government in addressing this problem will be provided.