Labour markets transitions in the greening economy
Structural drivers and the role of policies
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.
Published on May 07, 2024
In series:OECD Economics Department Working Papersview more titles