Can the wind lift the poor? Local economic effects of wind energy in Brazil’s semiarid northeast

Abstract

Brazil’s Northeast—55 million people and GDP per capita one-third the national average—hosted the developing world’s largest wind boom: from near zero to 31 GW in barely a decade. Did the gains reach the communities that hosted it? Exploiting the staggered rollout of wind farms across 1613 municipalities (2005–2021) with the Callaway-Sant’Anna (2021) and Sun-Abraham (2021) estimators, we compare 41 host municipalities to 1572 controls. Wind farm installation raises GDP per capita by about 20 % (15–23 % across estimators), and pre-treatment trends are flat under heterogeneity-robust estimation. The gains are not merely mechanical: value added in local services—a sector unrelated to electricity generation—rises about 12 %, and formal employment increases in both poorer and richer hosts. Proportional gains are larger in poorer municipalities (+29 %) than richer ones (+13 %; +26 and +16 % under the Callaway-Sant’Anna estimator), yet in absolute terms both gain similarly (R$3200–4100 per capita): the larger percentage reflects a smaller base, not a larger income gain. Results survive permutation placebo tests (p < 0.001), municipality-level wild cluster bootstrap (p = 0.008), municipality-specific linear trends, and the exclusion of any single state. Wind energy can lift incomes in some of Latin America’s poorest communities—proportionally, if not in absolute magnitude.