The Local Job Multipliers of Green Industrialization

Federico Fabio Frattini, Francesco Vona, Filippo Bontadini and Italo Colantone
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Federico Fabio Frattini: Fondazione Eni Enrico Mattei
Francesco Vona: University of Milan and Fondazione Eni Enrico Mattei
Filippo Bontadini: Luiss University and SPRU - University of Sussex
Italo Colantone: Bocconi University, GREEN Research Center, Baffi Research Centre, CESifo and Fondazione Eni Enrico Mattei

No 2025.13, Working Papers from Fondazione Eni Enrico Mattei

Abstract: What are the job multipliers of the green industrialization? We tackle this question within EU regions over the period 2003-2017, building a novel measure of green manufacturing penetration that combines green production and regional employment data. We estimate local job multipliers of green penetration in a long-difference model, using a shift-share instrument that exploits plausibly exogenous changes in non-EU green innovation. We find that a 3-years change in green penetration per worker increases the employment-to-active population ratio by 0.11 pp. The effect is: persistent both in manufacturing and outside manufacturing; halved by agglomeration effects that increase the labour market tightness; stronger for workers with high and low-education; and present also in regions specialized in polluting industries. When focusing on large shocks in a staggered DiD design, we find ten times larger effects, particularly in earlier periods.

Keywords: Green industrialisation; Local job multipliers; Employment effects of the green transition; Shift-share IV design; Difference-in-differences (search for similar items in EconPapers)
JEL-codes: J21 O14 R11 (search for similar items in EconPapers)
Date: 2025-06
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