Charged Up? Distributional Impacts of Green Energy on Local Labor Markets

Book excerpt: This paper studies the overall and distributional effects of the green energy transition on local labor markets in the United States from 2005 to 2019. Utilizing exogenous solar and wind potentials derived from remote sensing data, we identify the causal impact of the expansion in solar and wind energy. Our findings reveal that the growth in solar and wind capacity has led to a modest but significant increase in employment and labor force participation, with solar energy also contributing to wage growth. The most substantial benefits, in terms of job opportunities and wage increases, are observed among younger, lower-educated, non-Hispanic white workers. We also observe a surge in employment in greener occupations, particularly in the manufacturing sector. Our results suggest that these effects are driven by an increase in jobs and business establishments in manufacturing sectors, accompanied by a reduction in government transfers across various welfare programs.