Renewable energy sources and unemployment rate: Evidence from the US states

This study evaluates the effect of renewable, non-renewable energy consumption and economic growth on unemployment rate across 51 US states over the period 1977–2017. We applied a fixed effect model and a Seemingly Unrelated Regression Equations (SURE) model, which allows for an unknown form of cross-sectional dependence and slope heterogeneity. While the results of the fixed effects model indicate the negative and positive effects of non-renewable and renewable energy consumption on the unemployment rate, respectively, mixed results were received by employing SURE model at the state level. By allowing for slope heterogeneity, the results of the SURE model confirm that the non-renewable and renewable energy consumption only have job-creating effects in 19 and 6 out of 51 states, respectively. The renewable energy consumption has pro-unemployment effect in 20 states. •In 51 US states, renewable and nonrenewable energy's effect on unemployment was tested.•A seemingly unrelated regression equations model was employed.•Non-renewable energy has a job-creating effect in 19 states.•Renewable energy consumption has a positive effect on employment in 6 states.