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Local labor impact of wind energy investment: An analysis of Portuguese municipalities

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  • Costa, Hélia
  • Veiga, Linda

Abstract

Investment in wind power has grown remarkably in the past decades in Portugal. Although economic development is an argument for investment incentive policies, little evidence exists as to their net impact on local-level unemployment. Using data for all 278 Portuguese mainland municipalities for the years 1997–2017, we assess the existence, distribution and duration of local-level labor impacts of wind power investment. Our results show there are short-term effects during the construction phase. We estimate a decrease of 0.17 and 0.23 percentage points in the total unemployment rate per 100 MW of installed power in each of the two years of the construction phase. These effects are felt mainly for unskilled labor and male workers. Further analysis of spatial interaction finds positive spatial spillovers for municipalities that are 30 km or less away but not farther, implying workers are willing to commute but not migrate. We find a very small sustained impact during the operations and maintenance phase, despite both short- and long-term impacts on municipalities' revenues.

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  • Costa, Hélia & Veiga, Linda, 2021. "Local labor impact of wind energy investment: An analysis of Portuguese municipalities," Energy Economics, Elsevier, vol. 94(C).
    • Handle: RePEc:eee:eneeco:v:94:y:2021:i:c:s0140988320303959
    DOI: 10.1016/j.eneco.2020.105055
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    Cited by:

    1. Jarvis, Stephen, 2021. "The economic costs of NIMBYism: evidence from renewable energy projects," LSE Research Online Documents on Economics 113653, London School of Economics and Political Science, LSE Library.
    2. Zhang, Shuo & Yu, Yadong & Kharrazi, Ali & Ma, Tieju, 2023. "How would sustainable transformations in the electricity sector of megacities impact employment levels? A case study of Beijing," Energy, Elsevier, vol. 270(C).
    3. Migliavacca, Milena & Patel, Ritesh & Paltrinieri, Andrea & Goodell, John W., 2022. "Mapping impact investing: A bibliometric analysis," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 81(C).
    4. Duarte, Rosa & García-Riazuelo, Álvaro & Sáez, Luis Antonio & Sarasa, Cristina, 2022. "Economic and territorial integration of renewables in rural areas: Lessons from a long-term perspective," Energy Economics, Elsevier, vol. 110(C).
    5. Gavard, Claire & Göbel, Jonas & Schoch, Niklas, 2022. "Local economic impacts of wind power deployment in Denmark," ZEW Discussion Papers 22-058, ZEW - Leibniz Centre for European Economic Research.

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    More about this item

    Keywords

    Wind power; Labor effects; Local economy; Panel data;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • H70 - Public Economics - - State and Local Government; Intergovernmental Relations - - - General
    • Q50 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - General

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