2024/21 LEM Working Paper Series

Creating Jobs Out of the Green: The Employment Effects of the Energy Transition

Elisabetta Cappa, Francesco Lamperti and Gianluca Pallante
  Keywords
 
renewable energy, employment multiplier, green stimulus, shift-share


  JEL Classifications
 
Q43, Q20, Q50, C26, O44
  Abstract
 
This paper empirically analyzes the employment macro-regional effects of renewable energy (RE) investments. It uses a novel geo-localized dataset tracking RE installations across four European countries and spanning three decades. To address the non-random deployment of RE plants, we exploit the physical potential for RE technologies and construct an instrument for the regional exposure to technology-specific investments. We find that one megawatt of installed capacity generates 40 jobs over seven years, primarily in construction and agriculture. Impacts are concentrated in rural and low-income areas, and extend to regional output, with an RE investment multiplier exceeding unity over a 5-year horizon.
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