Commercial Wind Energy Installations and Local Economic Development Evidence from U.S. Counties

Abstract

We examine the causal impact of wind energy installation on the local economies of counties in the United States. Using data on the universe of commercial wind energy installations from 1995-2018 and a difference-in-differences instrumental variable identification strategy, we find that wind energy installation led to economically meaningful and statistically significant increases in county GDP per-capita, income per-capita, median household income, and median home values. We also find evidence that while wind energy installation has little effect on total employment, the composition of local employment shifts away from farm towards non-farm employment, notably leading to an increase in construction and manufacturing employment. Finally, we show that the impact of wind energy installation on local economic development varies significantly by installed capacity and by county urban/rural status.

Keywords: wind energy, economic development, economic impact, renewable energy