Umeå Economic Studies,
Umeå University, Department of Economics

Abstract: This paper investigates the short-run labor market effects of a major industrial investment, using the announcement of a large battery factory in northern Sweden as a case study. Applying the synthetic control method (SCM) with three counterfactuals and disaggregating results by sector and gender, the analysis uncovers uneven adjustments beneath stable aggregate employment. Public sector jobs falls markedly – driven by a 5.6% annual decline among women – while manufacturing and construction show only minor changes. The effect on income is modest, with small gains for men in manufacturing. The findings show that such investments can trigger short-term labor reallocation rather than immediate job creation, particularly in regions with tight labor markets and demographic stagnation.

Keywords: Industrial Investments; Local Labor Market; Synthetic Control Method; Gender Disparities; Sectoral Employment Shifts

JEL-codes: J21; J24; J31; O18; R23

Language: English

70 pages, February 6, 2026

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