The Effects of Renewable Energy Projects on Employment: Evidence from Brazil

48 Pages Posted: 29 Nov 2023

See all articles by Danae Hernandez-Cortes

Danae Hernandez-Cortes

Arizona State University (ASU)

Sophie Mathes

Brazilian School of Economics and Finance (FGV EPGE)

Date Written: November 8, 2023

Abstract

This paper studies the employment impacts of renewable energy projects in Brazil. Between 2006 and 2017, Brazil's solar capacity grew from 0.001 GW to 1.01 GW, and wind capacity grew from 0.23 GW to 12.4 GW. Using detailed employment information from the universe of formal workers in Brazil, we analyze how the development of renewable energy projects impacts local economies.
We find that when new wind energy projects come online, the number of firms in a municipality increases by 14.84 percent and total employment in a municipality increases by 15.95 percent. Employment in occupations related to electricity, construction, and transportation increase by even more. The employment increases appear to stem from growth of existing firms and increased entry of new firms. The findings are mirrored in municipal sales tax revenue and income tax revenue. Our results are not explained by electricity grid expansions or construction of federal roads. Notably, we find larger effects in areas with high shares of informality.

Keywords: employment, renewable energy

JEL Classification: Q4, Q52

Suggested Citation

Hernandez-Cortes, Danae and Mathes, Sophie, The Effects of Renewable Energy Projects on Employment: Evidence from Brazil (November 8, 2023). Available at SSRN: https://ssrn.com/abstract=4626599 or http://dx.doi.org/10.2139/ssrn.4626599

Danae Hernandez-Cortes (Contact Author)

Arizona State University (ASU) ( email )

Farmer Building 440G PO Box 872011
Tempe, AZ 85287
United States

Sophie Mathes

Brazilian School of Economics and Finance (FGV EPGE) ( email )

Praia de Botafogo 190
Rio de Janeiro, 22250900

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