Yves here. Green New Deal boosters tout all the great jobs that the energy transition will create. They overlook employment losses and/or simply assume those workers will be able to step into new roles. The post below suggests the skill difference means that may not be the case. And “let them eat training” remedies don’t have a great record of success.
By Orsetta Causa, Senior Economist Organisation for Economic Co-Operation and Development (OECD); Maxime Nguyen, Consultant Organisation for Economic Co-Operation and Development (OECD); and Emilia Soldani, Economist Organisation for Economic Co-Operation and Development (OECD). Originally published at VoxEU
Greening the economy will entail the contraction of high-polluting jobs. This column presents new OECD research using labour force data from a large sample of European countries that suggests green and high-polluting jobs are unequally distributed across socioeconomic groups. Green jobs are associated with higher educational attainment, high-polluting jobs with lower educational attainment, and women are underrepresented in both green and high-polluting jobs. Minimising transition costs – with targeted policies that facilitate reskilling and match workers with high-demand jobs – will be crucial to accelerating decarbonisation while reducing displacement penalties for affected workers.
Greening the economy refers to the transition towards more sustainable and environmentally friendly practices in various sectors (Pisu et al. 2022). This can significantly impact labour market outcomes and inequalities, including job creation and transformation, skills demand and training, as well as territorial disparities. While aggregate employment effects could be relatively small, the combination of policies and technological change needed to bring about decarbonisation will require reallocation of production factors, which will have distributional effects, possibly increasing inequality.
One lesson from the impact of globalisation/technological change is that moderate aggregate effects or even aggregate gains can go hand-in-hand with concentrated losses for certain groups of workers and their communities, especially when the changes take place rapidly (Ottaviano et al. 2021). Preventing this from happening in the green transition requires understanding labour market dynamics and elaborating appropriate policy responses. Such policies would improve the allocation of workers and their deployability – for instance, towards performing green tasks – as well as working to manage and minimise the scarring effects associated with job losses in polluting industries. Understanding and addressing distributional implications of climate policies is also fundamental for political acceptability (Stantcheva et al. 2022).
Based on our two recent papers (Causa et al. 2024a, 2024b), in this column we deliver new evidence and stylised facts on the incidence across selected European countries of green and high polluting jobs, their geographical distribution, and their incidence among different categories of workers. By identifying the characteristics of affected workers, we provide insights on how public policies can support workers and a just transition to low-emission economies.
A New Empirical Framework to Study the Labour Market Effects of the Green Transition
The starting point is a new empirical framework to study the labour market effects of the green transition, contributing to the literature and debate along the following dimensions: (1) the cross-country comparative perspective, (2) the use of individual/worker-level data, and (3) the empirically based granular analysis. Most of the empirical literature in this area has focused either on single countries, in particular the US thanks to the availability of high-quality ready-to use data, or on cross-country aggregate data.
The analysis builds on established measurement approaches for identifying ‘green’ and ‘high-polluting’ jobs, in particular O*NET (2010) based on US information. The framework is worked out and revisited to be applied to harmonised European labour force survey data. To overcome the limitations of applying US-based metrics, this paper proposes a new approach to identify ‘high-polluting’ jobs, based on European emission data by country and industry. The main advantage of relying on country-specific data on emissions is that it allows the capture of cross-country heterogeneity in emission intensity by industry. The analysis shows that these differences can be very large: for instance, in electricity, gas, steam, and air conditioning supply activities, the most polluting countries emit four times more GHG per worker than the least polluting countries.
Stylised Facts About Green and High Polluting Jobs
The Big Picture
Based on the newly developed empirical approach, Figure 1 reports the estimated shares of green and high polluting jobs across European countries over the period 2011–2019. The main highlights are:
- The estimated share of green jobs is 8% on average across the countries covered. The incidence of green jobs varies between around 10% in the UK and Estonia, and 5% in Greece.
- The estimated share of high polluting jobs is around 4% on average across the countries covered. This share varies from around 9% in Czechia and the Slovak Republic to 2% in Austria and Portugal.
- Over the last decade, labour markets have not become significantly greener, on average, across the European countries covered. There has been no significant change in the share of green and high polluting jobs; some countries have actually experienced an increase in the incidence of high polluting jobs.
Figure 1 Green and high polluting jobs across European countries, 2011–2019
Share of total employment (%)
A) Green jobs
B) High polluting jobs
