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‘Green’ growth, ‘green’ jobs and labour markets

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  • Alex Bowen
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    Abstract

    The term ‘green jobs’ can refer to employment in a narrowly defined set of industries providing environmental services. But it is more useful for the policy-maker to focus on the broader issue of the employment consequences of policies to correct environmental externalities such as anthropogenic climate change. Most of the literature focuses on direct employment created, with more cursory treatment of indirect and induced job creation, especially that arising from macroeconomic effects of policies. The potential adverse impacts of green growth policies on labour productivity and the costs of employment tend to be overlooked. More attention also needs to be paid in this literature to how labour markets work in different types of economy. There may be wedges between the shadow wage and the actual wage, particularly in developing countries with segmented labour markets and after adverse aggregate demand shocks, warranting a bigger and longer-lasting boost to green projects with high labour content. In these circumstances, the transition to green growth and job creation can go hand in hand. But there are challenges, especially for countries that have built their industrial development strategies around cheap carbon-based energy. Induced structural change, green or otherwise, should be accompanied by active labour market policies.

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    Paper provided by Grantham Research Institute on Climate Change and the Environment in its series Grantham Research Institute on Climate Change and the Environment Working Papers with number 76.

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    Date of creation: Apr 2012
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    Handle: RePEc:lsg:lsgwps:wp76

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    1. Don Fullerton & Gilbert E. Metcalf, 1997. "Environmental Taxes and the Double-Dividend Hypothesis: Did You Really Expect Something for Nothing?," NBER Working Papers 6199, National Bureau of Economic Research, Inc.
    2. Fullerton Don & Heutel Garth, 2011. "Analytical General Equilibrium Effects of Energy Policy on Output and Factor Prices," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 10(2), pages 1-26, January.
    3. Mathan Satchi & Jonathan Temple, 2009. "Labor Markets and Productivity in Developing Countries," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 12(1), pages 183-204, January.
    4. Alex Bowen & Nicholas Stern, 2010. "Environmental policy and the economic downturn," Grantham Research Institute on Climate Change and the Environment Working Papers 16, Grantham Research Institute on Climate Change and the Environment.
    5. Alex Bowen & Nicholas Stern, 2010. "Environmental policy and the economic downturn," Oxford Review of Economic Policy, Oxford University Press, vol. 26(2), pages 137-163, Summer.
    6. Otero, Jesus G., 2000. "Coffee, economic fluctuations and stabilisation: an intertemporal disequilibrium model with capital market imperfections," Journal of Development Economics, Elsevier, vol. 62(1), pages 105-129, June.
    7. Mazumdar, Dipak, 1976. "The Rural-Urban Wage Gap, Migration, and the Shadow Wage," Oxford Economic Papers, Oxford University Press, vol. 28(3), pages 406-25, November.
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