Cars and the Green Transition: Challenges and Opportunities for European Workers

By Oya Celasun, Galen Sher, Petia Topalova, Jing Zhou

June 2, 2023

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Oya Celasun, Galen Sher, Petia Topalova, and Jing Zhou. Cars and the Green Transition: Challenges and Opportunities for European Workers, (USA: International Monetary Fund, 2023) accessed November 21, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

Reducing transport sector emissions is an important pillar of the green transition. However, the transition to electric vehicles (EV) portends major changes in vehicle manufacturing activity, on which many livelihoods in Europe depend. Using the heterogeneity across European countries in the speed of transition to EV production and variation in sectoral and regional exposure to the automotive sector, this paper offers early evidence of the labor market implications of the EV transition. Our results suggest that the transformation of the auto sector is already having an adverse impact on employment in the affected sectors and regions, which can be expected to grow at least in the near term. Many of the affected workers will be able to retire and our analysis suggests that those who will have to transition to new “greener” jobs have a fair chance to do so when compared to other workers in the manufacturing sector. Furthermore, we find evidence that active labor market policies, specifically training, can help to reduce the adjustment costs for the affected workers.

Subject: Automobile industry, Economic sectors, Employment, Employment rate, Exports, International trade, Labor, Labor markets

Keywords: Automobile industry, Electric vehicle, Electric vehicle charging station, Employment, Employment rate, Europe, EV production, EV transition, Exports, Global, Green transition, Labor market outcome, Labor market policy, Labor markets, Transition to electric vehicles

Publication Details

Pages:

32
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2023/116
Stock No:

WPIEA2023116
ISBN:

9798400244766
ISSN:

1018-5941

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