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The impact of wind power on the Brazilian labor market

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  • Solange Goncalves
  • Thiago Rodrigues, Andre Chagas

Abstract

Wind power is an important source of renewable energy. Beyond the environmental dimension, the wind energy may contribute to the local development. Due to its weather conditions, Brazil emerges as one of the leading countries in the generation of wind power. This study estimates the impact of wind farms on the Brazilian labor market, through the exploration of the staggered nature of the sequential process of wind farm implantation between 2004 and 2016. We estimate the treatment effect parameters using a Difference--in--Differences (DiD) approach with: i) multiple time periods, ii) variation in treatment timing, and iii) dynamic treatment effects, through an event study design. We aggregate information from several data sources into a panel and we analyze the impact on employment and wages, by considering economic sectors, educational levels, and firm sizes. Our findings suggest that wind farms increase employment in the industry, agriculture and construction, and increase the wages in all economic sectors. Additionally, we find positive effects on the employment and wages of less--educated workers, and of small and medium--sized firms. The impact of this intervention can last for up to two years. Our results suggest that wind power may generate significant social impacts through the labor market, by contributing to local development and increasing social welfare in developing economies.

Suggested Citation

  • Solange Goncalves & Thiago Rodrigues, Andre Chagas, 2019. "The impact of wind power on the Brazilian labor market," Working Papers, Department of Economics 2019_41, University of São Paulo (FEA-USP).
    • Handle: RePEc:spa:wpaper:2019wpecon41
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    4. Anne A. Gharaibeh & Deema A. Al-Shboul & Abdulla M. Al-Rawabdeh & Rasheed A. Jaradat, 2021. "Establishing Regional Power Sustainability and Feasibility Using Wind Farm Land-Use Optimization," Land, MDPI, vol. 10(5), pages 1-32, April.
    5. Arvanitopoulos, T. & Agnolucci, P., 2020. "The long-term effect of renewable electricity on employment in the United Kingdom," Renewable and Sustainable Energy Reviews, Elsevier, vol. 134(C).
    6. Diniz, Tiago B. & Caiado Couto, Lilia, 2024. "Achieving a high share of non-hydro renewable integration in Brazil through wind power: Regional growth and employment effects," Renewable and Sustainable Energy Reviews, Elsevier, vol. 197(C).
    7. Nunes, Gustavo & Giglio, Thalita, 2022. "Effects of climate change in the thermal and energy performance of low-income housing in Brazil—assessing design variable sensitivity over the 21st century," Renewable and Sustainable Energy Reviews, Elsevier, vol. 168(C).

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    More about this item

    Keywords

    Wind power; staggered difference-in-differences; event study; employment; wages; labor market;
    All these keywords.

    JEL classification:

    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • R58 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Regional Development Planning and Policy

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