Research Discussion Paper – RDP 2024-09 The ‘Clean Energy Transition’ and the Cost of Job Displacement in Energy-intensive Industries

This paper provides a comprehensive analysis of the costs of job displacement in energy-intensive industries in selected OECD countries. Based on harmonised linked employer-employee data from 14 OECD countries, we estimate the effect of job displacement in three energy-intensive industries, namely energy supply, heavy manufacturing and transport, compared to other industries. We find that workers displaced from energy supply and heavy manufacturing, experience larger earnings losses compared with workers in non-energy-intensive and transport sectors. Larger earnings losses mainly result from weaker re-employment outcomes in terms of wages and job instability but also challenges with finding another job. They reflect significant differences in the composition of workers and firms in energy supply and heavy manufacturing and the rest of the economy. Displaced workers in these sectors tend to be older, are less skilled and more likely to be previously employed in high-wage firms.