The development of wind energy infrastructure entails global benefits and can present opportunities for rural areas. Yet, its development can create local negative externalities and its benefits to hosting communities are not automatic. I study whether the development of wind farms cause revenue windfalls as the base of existing tax instruments increases and hence benefits financially receiving municipalities. To do so, I use Spanish municipality-level budget data for years 1994 to 2020 and exploit the timing of when wind projects are developed. Results based on a two-way fixed effect difference-in-difference and event study models show that the development of a wind farm results in an average 30 percent increase in municipal revenue per capita, which is mainly used to finance real investments and current expenditure. I show that these revenue windfalls, partially driven by an increase in the tax base, are complemented by local tax responses. Municipalities react to the development of a wind farm by increasing tax rates associated to this type of non-mobile capital investment close to maximum levels while decreasing the fiscal pressure associated with other property tax categories. 

This paper provides novel evidence of the effect of fiscal decentralization on inequality. We exploit the decentralization of the Spanish Personal Income Tax that took place in 2010 in order to document how granting normative power to heterogeneous sub-national regions affected the redistributive effect of the tax. We first provide descriptive evidence for stark heterogeneity of the pre-tax income distribution across regions. We show that decentralization decreased the regional Gini on average by 0.04 points. To document efficiency effects of the tax, we apply the methodology of Zidar (2019) and combine the heterogeneous distribution with national tax shocks. Results indicate that tax hikes on the rich are reflected by wage increases, while we find little effects on employment and output. 

In the presence of strong labor market segmentation, risk is unevenly distributed across worker groups, and it can lead to different demands for redistribution. We study the impact of labor market risk associated with temporary contracts on individual preferences for income redistribution. The Spanish labor market, where one-third of workers are employed under temporary contracts, provides a good context for our study. We use data from the European Social Survey from 2002 to 2018 and apply an exact matching methodology to isolate the effect of the contract type from other individual characteristics. Our results reveal that temporary contracts lead to an 11 percent increase in the likelihood of strongly supporting redistribution, irrespective of individuals’ education level or gender. In terms of age, the effect is concentrated among individuals aged 40 and above, indicating an increase in risk perception when this contractual figure becomes a dead end. During periods of macroeconomic uncertainty, which extend risk beyond contract type, the redistribution preferences of temporary and permanent workers equalize due to a substantial increase in the preferences of those with an ex-ante more secure labor market position. Our results document that labor market risk is a strong determinant of redistribution preferences.