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Abstract

Despite their growing importance, little is known about how green industrial policies with place-based provisions shape expectations. We provide causal evidence on how such policies influence labor market beliefs and behaviors during the energy transition. Using geographically targeted surveys with randomized information treatments, we show that national policies with localized provisions, particularly the Energy Community Bonus Credit, significantly improve labor market outlooks, increasing expected earnings growth and job-search effort among unemployed workers. These effects are stronger in areas with higher energy-sector employment shares but are attenuated among Republican respondents and individuals who anticipate policy reversal. Uncertainty surrounding policy eligibility further dampens these responses. Overall, our findings illustrate that clearly communicated green industrial policies with place-based components can meaningfully shape expectations in energy communities, with policy credibility playing a central role in belief formation.