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'Green'growth,'green'jobs and labor markets

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  • Bowen, Alex
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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 labor productivity and the costs of employment tend to be overlooked. More attention also needs to be paid in this literature to how labor 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 labor markets and after adverse aggregate demand shocks, warranting a bigger and longer-lasting boost to green projects with high labor 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 labor market policies.

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    Bibliographic Info

    Paper provided by The World Bank in its series Policy Research Working Paper Series with number 5990.

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    Date of creation: 01 Mar 2012
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    Handle: RePEc:wbk:wbrwps:5990

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    Keywords: Environmental Economics&Policies; Climate Change Mitigation and Green House Gases; Labor Markets; Climate Change Economics; Labor Policies;

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    1. Don Fullerton & Gilbert E. Metcalf, 1997. "Environmental Taxes and the Double Dividends Hypothesis: Did You Really Expect Something for Nothing?," Discussion Papers Series, Department of Economics, Tufts University, Department of Economics, Tufts University 9706, Department of Economics, Tufts University.
    2. Fields, Gary S., 1975. "Rural-urban migration, urban unemployment and underemployment, and job-search activity in LDCs," Journal of Development Economics, Elsevier, vol. 2(2), pages 165-187, June.
    3. Mathan Satchi & Jonathan Temple, 2008. "Labour Markets and Productivity in Developing Countries," Studies in Economics, Department of Economics, University of Kent 0805, Department of Economics, University of Kent.
    4. Valentina Bosetti, Carlo Carraro, Marzio Galeotti, Emanuele Massetti, Massimo Tavoni, 2006. "A World induced Technical Change Hybrid Model," The Energy Journal, International Association for Energy Economics, International Association for Energy Economics, vol. 0(Special I), pages 13-38.
    5. 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.
    6. 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.
    7. Mathan Satchi & Jonathan Temple, 2008. "Online Appendix for "Labor Markets and Productivity in Developing Countries"," Technical Appendices 06-167, Review of Economic Dynamics.
    8. 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.
    9. 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.
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