The impact of wind power on the Brazilian labor market

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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, firm sizes, and types of jobs – direct or indirect jobs. Our findings suggest that wind farms increase employment in the industry, agriculture and construction, and increase the wages in all economic sectors, and we find evidence that this effect occurs on indirect jobs. 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 after the implementation of wind farms in the municipalities. 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.