Conference Agenda

The green transition plays a crucial role for future labour markets, as fossil fuel-intensive industries are phased out and new climate-friendly production processes emerge, implying both job creation and destruction and thus relevant distributional effects. We therefore investigate the labour market implications of four comprehensive net-zero scenarios for the main relevant economic sectors using a macroeconomic Computable General Equilibrium model for Austria and a post-processing analysis based on detailed labour market data. We find relevant shifts in labour demand, requiring 2.5% to 3.7% of the labour force to change their occupation, depending on the underlying scenario. Our analysis highlights the importance of sectoral and occupational detail and the use of a comprehensive economy-wide analysis tool, as we find that indirect and induced employment effects can be larger than employment changes in directly affected sectors. At the occupational level, there is a strong increase in the demand for plant and machine operators, mainly due to increasing activities in the wood sector to process biomass and the greater need for drivers in an intensified public transport system, while service and sales workers are much less demanded as trade sectors lose relevance. For other occupations, net changes are small, but our analysis reveals relevant sectoral transition needs. A net-zero transition state also holds the potential for a more equal distribution of labour income, as occupations currently supplied by the lowest and highest income deciles will be demanded less, while demand for occupations currently supplied by middle-income deciles will increase. We also find a net increase in demand for occupations held by men and conclude that a more equal gender balance could potentially facilitate this job reallocation and reduce the need for cross-sectoral switching. Finally, we conclude that targeted policies in the context of a just net-zero transition must not only include the labour market, but also need to be specifically designed to take into account the multi-dimensional socio-economic backgrounds of the workforce.