Closures of coal-fired power stations in Australia: Local unemployment effects

Around one-third of Australia’s coal-fired power stations closed during 2012–2017, with
most of the remainder expected to close over coming decades. Current investment in
generation capacity is primarily in the form of alternative power, especially wind and solar.
In this paper we conduct an event study to assess the local unemployment effects of
Australia’s coal-fired power station closures. This is an issue of considerable interest
given the prominence of coal-fired power stations in local economies. Our analysis uses
monthly regional labour force survey data from the Australian Bureau of Statistics. We
find that there has on average been an increase in local unemployment of around 0.7
percentage points after the closures of coal-fired power stations, an effect that tends to
persist beyond the months immediately after closure. The findings raise questions about
appropriate policy responses for dealing with local structural adjustment issues facing
coal-reliant communities.