IDEAS home Printed from https://ideas.repec.org/a/eee/eneeco/v138y2024ics0140988324005589.html
   My bibliography  Save this article

The effects of long–distance power transmission on employment growth: Empirical evidence from ultra–high voltage projects of China

Author

Listed:
  • Zhao, Li
  • Gao, Zhengye
  • Ren, Shenggang

Abstract

Long–distance power transmission is a crucial solution for alleviating the uneven distribution of energy and promoting economic development. This work is the first to provide an estimate of the benefits to employment of long–distance power transmission. Using unique data from the China National Tax Survey Database for the years 2007–2016, we utilized ultra–high voltage (UHV) project of China as an exogenous shock to investigate how long–distance power transmission affects firms' labor demand by employing the difference–in–differences method. We found that the UHV system significantly increased firms' labor demand. A mechanism analysis suggested that the UHV system did this mainly by facilitating firm entry and expanding firm production scale. A heterogeneity analysis indicated that, compared with provinces with low grid reliability and grid capacity, firms in provinces with high grid reliability and grid capacity exhibited a stronger response to the UHV system in terms of labor demand. Our research findings provide a new solution for countries to balance resource distribution, energy transition, and employment growth.

Suggested Citation

  • 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).
    • Handle: RePEc:eee:eneeco:v:138:y:2024:i:c:s0140988324005589
    DOI: 10.1016/j.eneco.2024.107850
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0140988324005589
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.eneco.2024.107850?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Gray, Wayne B. & Shadbegian, Ronald J. & Wang, Chunbei & Meral, Merve, 2014. "Do EPA regulations affect labor demand? Evidence from the pulp and paper industry," Journal of Environmental Economics and Management, Elsevier, vol. 68(1), pages 188-202.
    2. Taryn Dinkelman, 2011. "The Effects of Rural Electrification on Employment: New Evidence from South Africa," American Economic Review, American Economic Association, vol. 101(7), pages 3078-3108, December.
    3. Duncan S. Callaway & Meredith Fowlie & Gavin McCormick, 2018. "Location, Location, Location: The Variable Value of Renewable Energy and Demand-Side Efficiency Resources," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 5(1), pages 39-75.
    4. Garin, Andrew, 2019. "Putting America to work, where? Evidence on the effectiveness of infrastructure construction as a locally targeted employment policy," Journal of Urban Economics, Elsevier, vol. 111(C), pages 108-131.
    5. Cui, Jingbo & Wang, Chunhua & Zhang, Junjie & Zheng, Yang, 2021. "The effectiveness of China’s regional carbon market pilots in reducing firm emissions," LSE Research Online Documents on Economics 113492, London School of Economics and Political Science, LSE Library.
    6. Popov, Alexander & Rocholl, Jörg, 2018. "Do credit shocks affect labor demand? Evidence for employment and wages during the financial crisis," Journal of Financial Intermediation, Elsevier, vol. 36(C), pages 16-27.
    7. Jose L. Groizard & Priya Ranjan & Antonio Rodriguez‐Lopez, 2015. "Trade Costs And Job Flows: Evidence From Establishment‐Level Data," Economic Inquiry, Western Economic Association International, vol. 53(1), pages 173-204, January.
    8. Thorsten Beck & Ross Levine & Alexey Levkov, 2010. "Big Bad Banks? The Winners and Losers from Bank Deregulation in the United States," Journal of Finance, American Finance Association, vol. 65(5), pages 1637-1667, October.
    9. Cox, Michael & Peichl, Andreas & Pestel, Nico & Siegloch, Sebastian, 2014. "Labor demand effects of rising electricity prices: Evidence for Germany," Energy Policy, Elsevier, vol. 75(C), pages 266-277.
    10. Shi, Wenming & Lin, Kun-Chin & McLaughlin, Heather & Qi, Guanqiu & Jin, Mengjie, 2020. "Spatial distribution of job opportunities in China: Evidence from the opening of the high-speed rail," Transportation Research Part A: Policy and Practice, Elsevier, vol. 133(C), pages 138-147.
    11. Cao, June & Li, Wenwen & Hasan, Iftekhar, 2023. "The impact of lowering carbon emissions on corporate labour investment: A quasi-natural experiment," Energy Economics, Elsevier, vol. 121(C).
    12. Elia, Stefano & Mariotti, Ilaria & Piscitello, Lucia, 2009. "The impact of outward FDI on the home country's labour demand and skill composition," International Business Review, Elsevier, vol. 18(4), pages 357-372, August.
    13. Doerr, Luisa & Dorn, Florian & Gaebler, Stefanie & Potrafke, Niklas, 2020. "How new airport infrastructure promotes tourism: evidence from a synthetic control approach in German regions," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 54(10), pages 1402-1412.
    14. Jongwanich, Juthathip & Kohpaiboon, Archanun & Obashi, Ayako, 2022. "Technological advancement, import penetration and labour markets: Evidence from Thailand," World Development, Elsevier, vol. 151(C).
    15. Ama Baafra Abeberese, 2017. "Electricity Cost and Firm Performance: Evidence from India," The Review of Economics and Statistics, MIT Press, vol. 99(5), pages 839-852, December.
    16. Stephie Fried & David Lagakos, 2023. "Electricity and Firm Productivity: A General-Equilibrium Approach," American Economic Journal: Macroeconomics, American Economic Association, vol. 15(4), pages 67-103, October.
    17. Rong, Shu & Liu, Kai & Huang, Si & Zhang, Qi, 2020. "FDI, labor market flexibility and employment in China," China Economic Review, Elsevier, vol. 61(C).
    18. Jonas Hjort & Jonas Poulsen, 2019. "The Arrival of Fast Internet and Employment in Africa," American Economic Review, American Economic Association, vol. 109(3), pages 1032-1079, March.
    19. Best, Rohan & Burke, Paul J., 2018. "Electricity availability: A precondition for faster economic growth?," Energy Economics, Elsevier, vol. 74(C), pages 321-329.
    20. Dickens, Richard & Machin, Stephen & Manning, Alan, 1999. "The Effects of Minimum Wages on Employment: Theory and Evidence from Britain," Journal of Labor Economics, University of Chicago Press, vol. 17(1), pages 1-22, January.
    21. Xia, Fang & Song, Feng, 2017. "The uneven development of wind power in China: Determinants and the role of supporting policies," Energy Economics, Elsevier, vol. 67(C), pages 278-286.
    22. Nasirov, Shahriyar & Girard, Aymeric & Peña, Cristobal & Salazar, Felipe & Simon, François, 2021. "Expansion of renewable energy in Chile: Analysis of the effects on employment," Energy, Elsevier, vol. 226(C).
    23. Costa, Hélia & Veiga, Linda, 2021. "Local labor impact of wind energy investment: An analysis of Portuguese municipalities," Energy Economics, Elsevier, vol. 94(C).
    24. Molly Lipscomb & A. Mushfiq Mobarak & Tania Barham, 2013. "Development Effects of Electrification: Evidence from the Topographic Placement of Hydropower Plants in Brazil," American Economic Journal: Applied Economics, American Economic Association, vol. 5(2), pages 200-231, April.
    25. Liu, Mengdi & Shadbegian, Ronald & Zhang, Bing, 2017. "Does environmental regulation affect labor demand in China? Evidence from the textile printing and dyeing industry," Journal of Environmental Economics and Management, Elsevier, vol. 86(C), pages 277-294.
    26. Mensah, Justice Tei, 2024. "Jobs! Electricity shortages and unemployment in Africa," Journal of Development Economics, Elsevier, vol. 167(C).
    27. Conley, Timothy G. & Dupor, Bill, 2013. "The American Recovery and Reinvestment Act: Solely a government jobs program?," Journal of Monetary Economics, Elsevier, vol. 60(5), pages 535-549.
    28. Chaurey, Ritam & Le, Duong Trung, 2022. "Infrastructure maintenance and rural economic activity: Evidence from India," Journal of Public Economics, Elsevier, vol. 214(C).
    29. Michael Greenstone, 2002. "The Impacts of Environmental Regulations on Industrial Activity: Evidence from the 1970 and 1977 Clean Air Act Amendments and the Census of Manufactures," Journal of Political Economy, University of Chicago Press, vol. 110(6), pages 1175-1219, December.
    30. Sun, Liyang & Abraham, Sarah, 2021. "Estimating dynamic treatment effects in event studies with heterogeneous treatment effects," Journal of Econometrics, Elsevier, vol. 225(2), pages 175-199.
    31. Nİhan Akyelken, 2015. "Infrastructure Development and Employment: The Case of Turkey," Regional Studies, Taylor & Francis Journals, vol. 49(8), pages 1360-1373, August.
    32. Dinlersoz, Emin M. & Fu, Zhe, 2022. "Infrastructure investment and growth in China: A quantitative assessment," Journal of Development Economics, Elsevier, vol. 158(C).
    33. Bennett, Daniel L., 2019. "Infrastructure investments and entrepreneurial dynamism in the U.S," Journal of Business Venturing, Elsevier, vol. 34(5), pages 1-1.
    34. Wei, Max & Patadia, Shana & Kammen, Daniel M., 2010. "Putting renewables and energy efficiency to work: How many jobs can the clean energy industry generate in the US?," Energy Policy, Elsevier, vol. 38(2), pages 919-931, February.
    35. Çetin, Müjgan & Eğrican, Nilüfer, 2011. "Employment impacts of solar energy in Turkey," Energy Policy, Elsevier, vol. 39(11), pages 7184-7190.
    36. LaRiviere, Jacob & Lyu, Xueying, 2022. "Transmission constraints, intermittent renewables and welfare," Journal of Environmental Economics and Management, Elsevier, vol. 112(C).
    37. Chakrabarti, Sandip, 2018. "Can highway development promote employment growth in India?," Transport Policy, Elsevier, vol. 69(C), pages 1-9.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Abiodun, Kehinde & Gilbert, Ben, 2022. "Does universal electrification shield firms from productivity loss?," World Development Perspectives, Elsevier, vol. 28(C).
    2. Mensah, Justice Tei, 2024. "Jobs! Electricity shortages and unemployment in Africa," Journal of Development Economics, Elsevier, vol. 167(C).
    3. Fried, Stephie & Lagakos, David, 2021. "Rural electrification, migration and structural transformation: Evidence from Ethiopia," Regional Science and Urban Economics, Elsevier, vol. 91(C).
    4. Li, Zhuo & Li, Yuanqi, 2024. "Environmental regulation and employment: Evidence from China's new Environmental Protection Law," Economic Analysis and Policy, Elsevier, vol. 82(C), pages 400-416.
    5. Chaurey, Ritam & Le, Duong Trung, 2022. "Infrastructure maintenance and rural economic activity: Evidence from India," Journal of Public Economics, Elsevier, vol. 214(C).
    6. Kassem, Dana, 2024. "Does electrification cause industrial development? Grid expansion and firm turnover in Indonesia," Journal of Development Economics, Elsevier, vol. 167(C).
    7. Montrone, Lorenzo & Steckel, Jan Christoph & Kalkuhl, Matthias, 2022. "The type of power capacity matters for economic development – Evidence from a global panel," Resource and Energy Economics, Elsevier, vol. 69(C).
    8. Jiyu Zhao & Ning Zhang, 2023. "Environmental regulation and labor market: a bibliometric analysis," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 25(7), pages 6095-6116, July.
    9. Liu, Mengdi & Tan, Ruipeng & Zhang, Bing, 2021. "The costs of “blue sky”: Environmental regulation, technology upgrading, and labor demand in China," Journal of Development Economics, Elsevier, vol. 150(C).
    10. Wugan Cai & Peiyun Ye, 2022. "Local-neighborhood effects of different environmental regulations on green innovation: evidence from prefecture level cities of China," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 24(4), pages 4810-4834, April.
    11. Missbach, Leonard & Steckel, Jan Christoph & Renner, Sebastian & Kraus, Sebastian, 2024. "Coal-fired power plants and industrial development," EconStor Preprints 300209, ZBW - Leibniz Information Centre for Economics.
    12. Abbasi ,Mansoureh & Lebrand,Mathilde Sylvie Maria & Mongoue,Arcady Bluette & Pongou,Roland & Zhang,Fan, 2022. "Roads, Electricity, and Jobs: Evidence of Infrastructure Complementarity in Sub-Saharan Africa," Policy Research Working Paper Series 9976, The World Bank.
    13. Mengdi Liu & Bing Zhang & Qiang Geng, 2018. "Corporate pollution control strategies and labor demand: evidence from China’s manufacturing sector," Journal of Regulatory Economics, Springer, vol. 53(3), pages 298-326, June.
    14. Hunt Allcott & Allan Collard-Wexler & Stephen D. O'Connell, 2016. "How Do Electricity Shortages Affect Industry? Evidence from India," American Economic Review, American Economic Association, vol. 106(3), pages 587-624, March.
    15. Mensah,Justice Tei & Hirfrfot,Kibrom Tafere & Abay,Kibrom A., 2022. "Saving Lives through Technology : Mobile Phones and Infant Mortality," Policy Research Working Paper Series 9978, The World Bank.
    16. Chakraborty, Pavel & Chakrabarti, Anindya S. & Chatterjee, Chirantan, 2023. "Cross-border environmental regulation and firm labor demand," Journal of Environmental Economics and Management, Elsevier, vol. 117(C).
    17. Yang, Shubo & Jahanger, Atif & Hu, Juan & Awan, Ashar, 2024. "Impact of China's carbon emissions trading scheme on firm-level pollution abatement and employment: Evidence from a national panel dataset," Energy Economics, Elsevier, vol. 136(C).
    18. Ann Wolverton & Ron Shadbegian & Wayne Gray, 2022. "The U.S. Manufacturing Sector’s Response to Higher Electricity Prices: Evidence from State-Level Renewable Portfolio Standards," Working Papers 22-47, Center for Economic Studies, U.S. Census Bureau.
    19. Enrico Nano, 2022. "Electrifying Nigeria: the Impact of Rural Access to Electricity on Kids' Schooling," IHEID Working Papers 03-2022, Economics Section, The Graduate Institute of International Studies.
    20. Stephie Fried & David Lagakos, 2023. "Electricity and Firm Productivity: A General-Equilibrium Approach," American Economic Journal: Macroeconomics, American Economic Association, vol. 15(4), pages 67-103, October.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:eneeco:v:138:y:2024:i:c:s0140988324005589. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/eneco .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.