Copyright Page
© 2023 International Monetary Fund
SIP/2023/011
IMF Selected Issues Paper
European Department
Labor Market Implications for Green Investments and Carbon Pricing in Spain Prepared by Ana Lariau and Yu Shi
Authorized for distribution by Dora Iakova January 2023
IMF Selected Issues Papers are prepared by IMF staff as background documentation for periodic consultations with member countries. It is based on the information available at the time it was completed on December 16, 2022. This paper is also published separately as IMF Country Report No 23/034.
ABSTRACT: We provide a tractable framework for assessing the labor market impact of policies that support the green transition of the Spanish economy, taking into account input-output linkages. We present illustrative examples that quantify changes in sectoral employment, occupations and skills stemming from two different green policies: (i) the announced green investments in the recovery plan; and (ii) an increase in carbon pricing and an expansion of the EU Emission Trading System (ETS). Our analysis shows that the labor market impact of these two policies is net positive, although the results depend on the design of the green policies, particularly on the use of the proceeds from the increase in carbon pricing. Strengthening active labor market policies, with a focus on training, and complementing them with education policies such as the expansion of vocational training, would facilitate the transition of workers from shrinking to expanding sectors.
RECOMMENDED CITATION: Lariau, Ana and Shi, Yu. Labor Market Implications for Green Investments and Carbon Pricing in Spain. IMF Selected Issues Paper (SIP/2023/XXX). Washington, D.C.: International Monetary Fund.
| JEL Classification Numbers: | H54; J24; Q52; Q58 |
| Keywords: | green policies; input-output matrix; employment; occupations; skills |
| Author’s E-Mail Address: | ALariauBolentini@imf.org; YShi2@imf.org |
| JEL Classification Numbers: | H54; J24; Q52; Q58 |
| Keywords: | green policies; input-output matrix; employment; occupations; skills |
| Author’s E-Mail Address: | ALariauBolentini@imf.org; YShi2@imf.org |
Title Page
SELECTED ISSUES PAPERS
Labor Market Implications for Green Investments and Carbon Pricing in Spain
SPAIN
Title Page
SPAIN
SELECTED ISSUES
December 16, 2022
Approved By
European Department
Prepared By Ana Lariau and Yu Shi.
Contents
LABOR MARKET IMPLICATIONS OF GREEN INVESTMENTS AND CARBON PRICING IN SPAIN
A. Green Policies in Spain
B. The Labor Market Impact of Green Investments and Carbon Pricing
C. Conclusions and Policy Recommendations
ANNEXES
I. Estimation of Output and Employment Multipliers Using the Input-Output Approach
II. Results for the Alternative Carbon Pricing Shock Scenario, Not Taking into Account the Redistribution of Revenue Proceeds
References