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Labour markets transitions in the greening economy: Structural drivers and the role of policies

Author

Listed:
  • Orsetta Causa
  • Emilia Soldani
  • Maxime Nguyen
  • Tomomi Tanaka

Abstract

Climate change mitigation policies affect the allocation of workers on the labor market: jobs in high-polluting industries will contract, while jobs in the “green” sector will grow. A just transition in the labour market requires policies to improve the allocation of workers and their deployability, for instance towards performing green tasks; as well as to manage and minimise scarring effects associated with job losses in polluting industries. Using an econometric analysis, this paper investigates the role of structural and policy factors in shaping a number of relevant labour market transitions, uncovering heterogeneity across different groups of workers. Education is the most important individual-level driver of transitions from non-employment to green jobs, with a particularly strong effect from graduating in scientific fields for young people entering the labour market. Women are significantly less likely than men to move into green jobs out of non-employment. Workers employed in high-polluting occupations face higher displacement risks than other workers, but this does not translate into higher long-term unemployment risks. In terms of policies, the paper finds that the labour market implications of the greening economy can be addressed by general structural policies favouring labour market efficiency in terms of workers’ reallocation, labour market inclusiveness in terms of promoting equality of opportunities and minimising long-term scars. Results also suggest that place-based policies are needed to mitigate scarring effects for displaced workers.

Suggested Citation

  • Orsetta Causa & Emilia Soldani & Maxime Nguyen & Tomomi Tanaka, 2024. "Labour markets transitions in the greening economy: Structural drivers and the role of policies," OECD Economics Department Working Papers 1803, OECD Publishing.
  • Handle: RePEc:oec:ecoaaa:1803-en
    DOI: 10.1787/d8007e8f-en
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    More about this item

    Keywords

    green transition; labour markets; policy analysis;
    All these keywords.

    JEL classification:

    • J08 - Labor and Demographic Economics - - General - - - Labor Economics Policies
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • Q52 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Pollution Control Adoption and Costs; Distributional Effects; Employment Effects
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy

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