Local Labor Market Effects of Nuclear Power Plants
By Duha T. Altindag, Reem El Cheikh Taha, Jeniffer Jones, and R. Alan Seals, Jr.
Working Paper (2025)

This groundbreaking study explores the economic impacts of nuclear power plants (NPPs) on local labor markets in the United States, particularly during their construction and operational phases. Using a rich dataset spanning decades and employing a robust difference-in-differences framework, the authors provide critical insights into the short- and long-term effects of NPPs on employment and wages.

Key Findings:

• Construction Boosts Local Economies: The construction of NPPs significantly raises the employment-to-population ratio by approximately 10 percentage points (a 20% increase) and boosts per capita wages by 50%, translating to an $8,500 increase (2019 dollars).
• Short-Lived Benefits: These positive impacts are confined to the construction phase, with little to no significant economic benefits observed during the operational phase of NPPs. The operations increase employment and wages only in specific sectors, like public utilities.
• No Spillover Effects: Adjacent counties and broader commuting zones see minimal to no economic gains, suggesting the labor market benefits are highly localized.
• Sector-Specific Gains: The construction phase primarily benefits the construction industry, while operational benefits are limited to the public utilities sector. Other industries experience negligible impacts.
• Implications for Policy: The findings reveal that the economic benefits of NPPs are temporary and emphasize the need for complementary policies, such as investments in infrastructure, education, and industry diversification, to sustain long-term local economic growth.

Contribution to Policy and Research:

This paper not only adds to the literature on place-based policies but also informs the ongoing debate on nuclear energy as a sustainable energy source. It highlights the importance of considering localized economic benefits alongside broader energy policy goals, particularly in light of recent government initiatives to expand nuclear energy in the United States.

This research underscores the complex trade-offs associated with nuclear energy projects, advocating for strategies that ensure enduring economic benefits for host communities.