Will the Locals Benefit? The Effect of Wind Power Investments on Rural Wages

27 Pages Posted: 19 Mar 2020

Date Written: February 25, 2020

Abstract

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

Mauritzen, Johannes, Will the Locals Benefit? The Effect of Wind Power Investments on Rural Wages (February 25, 2020). Available at SSRN: https://ssrn.com/abstract=3544049 or http://dx.doi.org/10.2139/ssrn.3544049

Johannes Mauritzen (Contact Author)

BI Norwegian School of Business ( email )

Nydalsveien 37
Oslo, 0442
Norway

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