Effect of renewable energy consumption on employment in Uganda (1990–2024).

Abstract

This study examines the effect of renewable energy consumption on employment in Uganda over the period 1990–2024, with the aim of understanding the short-run and long-run effects of renewable energy consumption on total employment in Uganda, the influence of GDP per capita, trade openness, and foreign direct investment (FDI) on employment and the speed of adjustment of employment toward equilibrium following short-run shocks. Using time-series secondary data from the World Bank, the Uganda Bureau of Statistics (UBOS), and the International Energy Agency (IEA), the study employs econometric techniques including Ordinary Least Squares (OLS), Vector Error Correction Model (VECM), and Granger causality tests to analyze both short-run and long-run relationships between renewable energy consumption and employment. The results indicate a positive and statistically significant long-run relationship between renewable energy consumption and total employment, suggesting that increased investment and utilization of renewable energy sources such as solar, biomass, and hydro have contributed to expanding employment opportunities, particularly in rural and emerging green sectors. However, the short-run effects are found to be modest, reflecting the time lag between energy sector reforms and labor market adjustments. The study concludes that scaling up renewable energy investments, enhancing technical skills training, and strengthening policy frameworks can accelerate employment growth and support Uganda’s transition toward a green economy. The findings have important implications for energy policy, sustainable development, and the achievement of Uganda’s Vision 2040 and Sustainable Development Goals (SDGs). Keywords: Renewable energy, Employment, Econometric analysis, Sustainable development