Transitioning to a greener labor market: Cross-country evidence from microdata

Abstract

To better understand the potential consequences of the green economic transformation and green policies for workers, we construct and analyze a new set of harmonized indicators of the environmental properties of jobs using micro-level labor force survey data for a large cross-country sample of 31 countries over 2005–19. We find that greener and more polluting jobs are concentrated among small subsets of workers, individual workers rarely move from more pollution-intensive to greener jobs, and workers in green-intensive jobs earn on average 7% more than workers in pollution-intensive jobs. Stronger environmental policies are associated with a higher (lower) share of green-(pollution-)intensive jobs and appear to be even more effective when structural policies that incentivize greater flexibility in labor markets are operating. Taken together, the evidence suggests that with the right policies, the green transition for the labor market is manageable but will be tough for some workers.