TY - JOUR
T1 - The Employment Impact of a Green Fiscal Push
T2 - Evidence from the American Recovery and Reinvestment Act
AU - Popp, David
AU - Marin, Giovanni
AU - Vona, Francesco
AU - Chen, Ziqiao
N1 - Publisher Copyright:
© 2021, Brookings Institution Press. All rights reserved.
PY - 2021/9/1
Y1 - 2021/9/1
N2 - Investments in the green economy are used for both environmental goals and fiscal stimulus. The success of these investments depends, at least in part, on whether they create new jobs and whether such jobs are available to workers hurt by a green transition. We evaluate the employment effect of green investments from the American Recovery and Reinvestment Act (ARRA). Most job creation from green ARRA investments is permanent and emerged in the post-ARRA period, but the plausible range of estimates is extremely wide (zero to twenty-five jobs per $1 million). Such large uncertainty on aggregate effects masks substantial heterogeneity across communities. The green stimulus mostly benefited areas with a greater prevalence of preexisting green skills that created 40 percent additional jobs than average communities. New jobs are primarily manual labor and in occupations performing green tasks, especially in renewable energy. However, manual labor wages do not increase. Descriptive evidence suggests that the skill gap between green energy and fossil fuel workers is modest, but green jobs require significantly more training. Because the spatial distribution of skills and jobs matters, using green stimuli can help reshape the economy in the long run but may also exacerbate regional inequities associated with the green energy transition.
AB - Investments in the green economy are used for both environmental goals and fiscal stimulus. The success of these investments depends, at least in part, on whether they create new jobs and whether such jobs are available to workers hurt by a green transition. We evaluate the employment effect of green investments from the American Recovery and Reinvestment Act (ARRA). Most job creation from green ARRA investments is permanent and emerged in the post-ARRA period, but the plausible range of estimates is extremely wide (zero to twenty-five jobs per $1 million). Such large uncertainty on aggregate effects masks substantial heterogeneity across communities. The green stimulus mostly benefited areas with a greater prevalence of preexisting green skills that created 40 percent additional jobs than average communities. New jobs are primarily manual labor and in occupations performing green tasks, especially in renewable energy. However, manual labor wages do not increase. Descriptive evidence suggests that the skill gap between green energy and fossil fuel workers is modest, but green jobs require significantly more training. Because the spatial distribution of skills and jobs matters, using green stimuli can help reshape the economy in the long run but may also exacerbate regional inequities associated with the green energy transition.
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U2 - 10.1353/eca.2022.0000
DO - 10.1353/eca.2022.0000
M3 - Article
AN - SCOPUS:85132908554
SN - 0007-2303
VL - 2021-Fall
SP - 1
EP - 69
JO - Brookings Papers on Economic Activity
JF - Brookings Papers on Economic Activity
ER -