Working Papers

Green Technology Adoption and Skill Reallocation, with Sacha de Nijs

 [Conference Presentation Video]  [Link to Discussion Paper] 

The green transition towards a carbon neutral economy constitutes a large technological transformation, in which firms need to invest in new, clean technologies. In order to be operated, these new technologies often require a set of technology-specific skills that differ from those that were relevant for dirtier predecessors. We model the clean technology investment decision of firms in a labour market with search frictions and two-sided heterogeneity. We find that the presence of skill mismatch negatively affects the expected productivity of the new, green technologies, delaying their adoption and resulting in higher emission intensity in production compared to a counterfactual with no labour market frictions. The induced effect is of first-order, making it policy-relevant. This slower diffusion of green technologies in the presence of skill heterogeneity results in workers with green skills being locked in brown jobs. We also find that an accelerated greening of the economy leads to larger labour market transitions. More specialized new technologies further reinforce these effects, and so does a slower pace of technological progress. Finally, our model results suggests that retraining subsidies are a useful policy tool both in the absence as well as the presence of a carbon tax or investment subsidies.

Doing green things: skills, reallocation, and the green transition, with Dan Andrews and Alain de Serres.

 [OECD Paper link] 

This paper applies a task-based framework to country-specific employment sources to generate new indicators on the green skills structure of labour markets. Significant cross-country differences emerge in the underlying supply of green skills and the potential of economies to reallocate brown job workers to green jobs within their broad occupation categories. Workers from most detailed brown occupations have the necessary skills to transition to green jobs, although policymakers should pay close attention workers in production occupations where transitions to green jobs appear less feasible. We also show that workers from most highly automatable occupations do not have the sufficient skills to transition to green jobs, suggesting limited potential for the Green Transition to reinstate labour displaced by automation.  

Shocks to future income and (no) consumption-smoothening: Evidence from the abolition of the state pension partner supplement in the Netherlands, with Casper van Ewijk & Ralph Stevens  [Working Paper link] [SSRN link]

We utilize the abolishment of the state pension partner supplement in the Netherlands to investigate the effect of a change in future income on the marginal propensity to consume. We employ a difference-in-difference-in-differences setup and find no effect in people’s labour and consumption decision due to the supplement abolishment.

Work in Progress

Sorting, Technology Choice, and Specialization, with Björn Brügemann & Pieter Gautier

We build a search model of the labour market with worker and firm skill heterogeneity. Firms’ technology choice interacts with labour market frictions to determine the level of specialization. Using occupational skill requirements from O*NET we construct measures of occupational, state, and MSA specialization and study its relation with frictions and UI benefits.