Win-Wind situation? The Local Labor Market and Wind Power Investments in Sweden

Abstract: This thesis examines the local economic impacts of wind power deployment in Sweden, focusing on the net labor market effects. Using a difference-in-differences model and a local projections model, the study quantifies the impact of wind power investments on unemployment at the municipal level. The results suggest that wind power decreases unemployment by approximately 0.7-2.7 persons per megawatt in operation. For an average wind power project, this corresponds to a persistent reduction in unemployment levels by 0.33%-1.2%. In contrast to previous literature, the effect is lower rather than higher during the construction period compared to the post-installation period. Furthermore, the heterogeneity analysis shows that no socioeconomic group is adversely affected and that men and those with lower levels of education benefit the most. Moreover, there are small beneficial spatial spillovers from wind turbines located within ten kilometers outside of a municipality's border but no effect further away. These findings highlight the potential of wind power investments as a tool for local economic development and contribute to the ongoing discussion on the transition to a more sustainable and resilient energy system.