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High Voltage, Uneven Impact: Local Labor Market Adjustments Following The Establishment of a Battery Factory in Northern Sweden

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Abstract

This paper investigates the short-run labor market effects of a major industrial investment, using the announcement of a large battery factory in northern Sweden as a case study. Applying the synthetic control method (SCM) with three counterfactuals and disaggregating results by sector and gender, the analysis uncovers uneven adjustments beneath stable aggregate employment. Public sector jobs falls markedly – driven by a 5.6% annual decline among women – while manufacturing and construction show only minor changes. The effect on income is modest, with small gains for men in manufacturing. The findings show that such investments can trigger short-term labor reallocation rather than immediate job creation, particularly in regions with tight labor markets and demographic stagnation.

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  • Zimmerman, Karin, 2026. "High Voltage, Uneven Impact: Local Labor Market Adjustments Following The Establishment of a Battery Factory in Northern Sweden," Umeå Economic Studies 1044, Umeå University, Department of Economics.
    • Handle: RePEc:hhs:umnees:1044
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    JEL classification:

    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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