Heterogeneous impacts of climate policy on regional and gendered labor market outcomes in Europe
Final Report Abstract
We present the first empirical analysis on the gender differences in labor market outcomes in response to energy price changes across European regions. As theory and empirics indicate potentially heterogeneous employment effects at the regional level and between males and females in response to climate policy, this project contributes to the academic literature on heterogeneous socioeconomic effects of climate policy by exploring gendered and regional employment effects of climate policy. Specifically, this project assesses the effects of energy prices, as proxy for climate policy, on male and female employment and explores various mechanisms - like commuting responses - that underlie the aggregate results. The analysis is based on a sample of 64 European NUTS-2 regions between 2000 and 2016 from seven European countries: Belgium, the Czech Republic, Denmark, Italy, Hungary, Finland, and Norway. The inclusion of additional countries was prohibited due to need for regional data on sectoral value added at sufficient levels of disaggregation. The study contributes to the respective literature on the distributional effects of energy price changes as well as the literature on gender differences in labor market responses. We provide important insights on the potential mechanisms by which gender differences in labor market outcomes occur. Our findings may prove relevant to policy-making that aims at securing a just and inclusive green transition. Our main findings show that the regions that are exposed to increases in energy prices experience declines in the overall employment rate and that these negative employment effects are larger for females. Quantitatively, a doubling of energy prices leads to a 5 percentage points increase in the gender gap in employment rates. The negative employment effects are relatively higher for both females and males in manufacturing and industry, which are more exposed to energy price changes due to their higher energy intensity. We also document that an increase in energy prices is associated with a substantial increase in the registrations at and support usage from the public employment offices with a larger effect for females. Investigating the potential mechanisms behind the higher vulnerability of females, we find that the increase in cross regional mobility in response to energy price increases is lower for females.
