Trapped or Transferred: Worker Mobility and Labor Market Power in the Energy Transition

Minwoo Hyun

Working Papers from U.S. Census Bureau, Center for Economic Studies

Abstract: Using matched employer-employee data covering 1.35 million US workers separated from the fossil fuel extraction industry between 1999 and 2019, I estimate how local fossil fuel labor demand shocks affect employment and earnings. Employment probabilities fall markedly after exposure, and earnings decline gradually over the first seven years with only partial recovery by ten years since exposure to the shocks. Workers who remain in the fossil fuel sector, disproportionately men in sector-specific roles, experience nearly twice the earnings losses of those who switch sectors, possibly due to limited occupational mobility. Among non-switchers, losses are larger in labor markets with high employer concentration, indicating that scarce outside options translate into lower reemployment wages and weaker bargaining positions. Geographic movers fare worse than stayers, reflecting negative selection (younger, lower-earning) and relocation to metropolitan areas where fossil fuel or low-skilled service sectors remain highly concentrated, leaving monopsony power intact.

JEL-codes: J31 J42 J60 Q32 R11 (search for similar items in EconPapers)
Date: 2025-12
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