The Short- and Long-Term Effects of Renewable Energy Production on Unemployment with an Emphasis on Good Governance in Selected Countries: An Application of Panel GMM and FMOLS Models

Document Type : Original Article

Authors

1 Associate Professor of Economics, Department of Economic Sciences, Faculty of Economics and Administrative Sciences, University of Mazandaran, Babolsar, Iran

2 Department of Economic Sciences, Faculty of Economics and Administrative Sciences, University of Mazandaran, Babolsar, Iran.

10.22080/jeem.2024.27841.1018

Abstract

Renewable energy production, as a key factor in sustainable development, significantly impacts economic growth. However, in the short term, this process may increase unemployment due to structural shifts in the economy and the transition from conventional to renewable energy sources. This study aims to investigate the short- and long-term effects of renewable energy production on unemployment, with a focus on the role of good governance. For this purpose, econometric techniques, including the Generalized Method of Moments (GMM) to estimate short-term effects and Fully Modified Ordinary Least Squares (FMOLS) to estimate long-term effects, are applied using data from 127 countries, including Iran, from 1996 to 2021. The findings reveal that while increased renewable energy production raises unemployment in the short term, it reduces unemployment in the long term. Furthermore, good governance can alleviate the short-term negative effects of renewable energy production on unemployment and strengthen its positive long-term impact on reducing unemployment

Keywords

Journal of Energy Economics Modeling
Volume 2, Issue 1
October 2024

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History

  • Receive Date: 09 October 2024
  • Revise Date: 10 November 2024
  • Accept Date: 22 November 2024
  • Publish Date: 22 September 2024

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