The Local Job Multipliers of Green Industrialization

Federico Fabio Frattini, Francesco Vona, Filippo Bontadini and Italo Colantone

No 11939, CESifo Working Paper Series from CESifo

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
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_11939

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