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Effect of climate policies on labor markets in developing countries: review of the evidence and directions for future research

Marc Hafstead, Roberton Williams (), Alexander Golub, Siet Meijer, Badri G. Narayanan, Kevin Nyamweya and Jevgenijs Steinbuks

No 8332, Policy Research Working Paper Series from The World Bank

Abstract: This study surveys one of the critical welfare aspects of contemplating climate policies in developing countries and their potential effect on workers and labor markets. The existing body of evidence finds that climate policies will likely cause a significant reduction of jobs in fossil-fuel industries. These industries make up a relatively small share of total employment, even in fossil-fuel-intensive countries. Therefore, the effect on aggregate employment will likely be small, especially over the long term, since there will be offsetting gains in other industries. However, most of the literature ignores the key features of developing country labor markets and may significantly misrepresent the dynamics of labor market adjustment to climate policies.

Date: 2018-02-07
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