Evaluating the Regional Development Effects of Wind Power Expansion in Sweden

Abstract

This study examines the development effects of wind power expansion in Sweden at the municipal level from 2003 to 2024. Using a municipality–year panel dataset, it investigates whether there are measurable gains and how they differ across municipalities, whether there are any effects on intramunicipal inequality, and if there are effects on the local employment structure. The analysis showed that wind power expansion is associated with a statistically significant, but negative effect on average municipal income; the effect is heterogeneous across municipalities that differ in population density, average income, and geographical location. On the other hand, there is little to no evidence of any effects on within-municipality inequality or on the municipal employment structure. These findings provide valuable insights for policymakers by suggesting that expanding wind power capacity alone is insufficient to simultaneously achieve environmental and economic objectives. Instead, policies should account for local conditions and distributional mechanisms to ensure that the green transition is both efficient and inclusive.