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

Author

Listed:
  • Hélia Costa

    (Toulouse School of Economics, University of Toulouse Capitole)

  • Linda Veiga

    (Department of Economics / NIPE, University of Minho)

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 a panel of 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 0.05 percentage points in the total unemployment rate for each KW per capita installed. These effects are confined to unskilled labor and male workers. Further analysis of spatial interaction fi nds positive spatial spillovers for municipalities that are 30km or less away but not farther, implying workers are willing to commute but not migrate. We find no evidence of sustained effects or impact during the operations and maintenance phase, despite both short and long term impacts in municipalities' revenues.

Suggested Citation

  • Hélia Costa & Linda Veiga, 2019. "Local labor impact of wind energy investment: an analysis of Portuguese municipalities," NIPE Working Papers 05/2019, NIPE - Universidade do Minho.
    • Handle: RePEc:nip:nipewp:05/2019
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    Cited by:

    1. Claire Gavard & Jonas Göbel & Niklas Schoch, 2025. "Local Economic Impacts of Wind Power Deployment in Denmark," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 88(6), pages 1679-1717, June.
    2. Cabrera, Pedro & Carta, José A. & Matos, Carlos & Rosales-Asensio, Enrique & Lund, Henrik, 2024. "Reduced desalination carbon footprint on islands with weak electricity grids. The case of Gran Canaria," Applied Energy, Elsevier, vol. 358(C).
    3. Fabra, Natalia & Gutiérrez, Eduardo & Lacuesta, Aitor & Ramos, Roberto, 2024. "Do renewable energy investments create local jobs?," Journal of Public Economics, Elsevier, vol. 239(C).
    4. Lingfan Xu & Ping Jiang, 2025. "Energy Policy Through a Gender Lens: The Impact of Wind Power Feed-In Tariff Policy on Female Employment," Sustainability, MDPI, vol. 17(10), pages 1-18, May.
    5. Zhao, Li & Gao, Zhengye & Ren, Shenggang, 2024. "The effects of long–distance power transmission on employment growth: Empirical evidence from ultra–high voltage projects of China," Energy Economics, Elsevier, vol. 138(C).
    6. Elisabetta Cappa & Francesco Lamperti & Gianluca Pallante, 2024. "Creating Jobs Out of the Green: The Employment Effects of the Energy Transition," LEM Papers Series 2024/21, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    7. 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).
    8. 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).
    9. Claudia Serra-Sala & Clàudia Serra-Sala, 2024. "Harnessing the Wind: The Impact of Wind Farm Development on Municipal Finances," CESifo Working Paper Series 11283, CESifo.
    10. 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).
    11. Stephen Jarvis, 2025. "The Economic Costs of NIMBYism: Evidence from Renewable Energy Projects," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 12(4), pages 983-1022.
    12. 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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    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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