Five frictions : key labor market barriers to unlocking job growth in the green transition

Title page 1

Contents 1

Abstract 2

1. Introduction 4

2. A framework for identifying labor market frictions in the green transition 5

3. Five labor market frictions 8

3.1. Skill mismatches 8

3.2. Spatial mismatches 12

3.3. Temporal mismatches 16

3.4. Norm mismatches 18

3.5. Preference mismatches 20

4. Overcoming labor market frictions 22

4.1. Closing the skill gap 26

4.2. Overcoming spatial challenges 31

4.3. Strategic temporal coordination 34

4.4. Inclusive workforce strategies 35

4.5. Navigating preference barriers 37

5. Discussion and future work 38

References 40

Tables 7

Table 1. A framework for identifying labor market frictions in the green transition 7

Table 2. Examples of potential policy solutions 24

Table 3. Selection of studies on identifying and monitoring skill needs 26

Table 4. Selection of studies on education and training as strategies for bridging the skill gap 29

Table 5. Literature on policies promoting inclusion in the labor market 36

Figures 9

Figure 1. A network visualization showing high task similarity between occupations with similar skill levels 9

Figure 2. Task similarity among growing occupations and their closest related roles 10

Figure 3. Occupational network showing limited overlap between the roles sought by unemployed workers and those relevant to the green hydrogen industry in Namibia 11

Figure 4. Examples of job transition opportunities for lignite mining technicians in Poland 12

Figure 5. Regional occupational mobility network and map of Brazil 13

Figure 6. Geographical distribution of employment in selected green mineral and fossil fuel sectors in Brazil 14

Figure 7. Maps of Namibia highlighting workforce scarcity in priority locations for green hydrogen production 15

Figure 8. An analysis of labor demand trends under a rapid decarbonization scenario in the United States power sector highlights critical temporal dynamics 17

Figure 9. Gender differences in occupational mobility in Georgia 19

Figure 10. Transition possibilities for workers in the petroleum and natural gas industry 21

Boxes 23

Box 1. Multifaceted obstacles to the successful retraining of coal workers 23

Box 2. Lessons learned from training initiatives in the European battery sector 28

Box 3. Lessons learned from phasing out coal in the Ruhr area 33