The transition to net-zero emissions by 2050 will have profound impacts on the labour market and the jobs of millions of workers. Aggregate effects on employment are estimated to be limited. But many jobs will be lost in the shrinking high-emission industries, while many others will be created in the expanding low-emission activities.

This edition of the OECD Employment Outlook examines the characteristics of the jobs that are likely to thrive because of the transition ('green-driven jobs'), including their attractiveness in terms of job quality, and compares them to jobs in high-emission industries that tend to shrink. The cost of job displacement in these latter industries is assessed along with the trajectories of workers out of them towards new opportunities, and the labour market policies that can facilitate job reallocation.

Particular attention is devoted to upskilling and reskilling strategies to facilitate workers’ transition into fast-growing, green-driven occupations. The distributive impacts of climate-change mitigation policies are also examined, with a focus on carbon pricing and options to redistribute its tax revenue to those most impacted. As usual, the first chapter of the report assesses recent labour market developments (including wage trends), but also provides an update of the OECD Job Quality indicators.

Key findings

• Labour markets have proved resilient in the wake of adverse shocks.
• Real wages are growing, but remain below 2019 levels in several OECD countries.
• Job quality was generally better in 2022 than in 2015.
• The net-zero transition will reshape the labour market.
• About 20% of the workforce is in jobs that will likely expand due to the net-zero transition.
• Skill requirements between GHG-intensive and green-driven occupations are similar, but low-skilled workers need substantial retraining.
• Developing policies to facilitate job transitions and support workers is key.