Will the Locals Benefit? The Effect of Wind Power Investments on Rural Wages
27 Pages Posted: 19 Mar 2020
Date Written: February 25, 2020
An important and poorly understood question when communities consider wind power investments is whether the local population will benefit financially. I examine the effect of wind power investment on wages in rural counties in the US. I combine quarterly panel data on wages with data on all wind power plant investments larger than 1 megawatt (MW). Using a Bayesian multilevel model estimated by MCMC, I estimate a significant positive effect, with a magnitude consistent with a 2\% permanent increase in wages following an investment in a large wind farm of 400 MW. however, this effect has large geographic and socio-economic variation. Counties with low employment tend to see little impact on wages from wind power, potentially because slack in the labor market prevents wages from rising. The findings have implications for energy policy and planning.
Keywords: Wind power, wages, rural, Bayesian, MCMC
JEL Classification: Q4, Q48
Suggested Citation: Suggested Citation