This paper considers the likely effects of public policies on workers in the transition to net zero. While aggregate employment effects could be relatively small, the authors argue that the combination of policies and technological change required to bring about decarbonisation will require considerable reallocation of production factors.

The labour market recovery from the COVID-19 pandemic has been strong among advanced countries, partly reflecting massive and unprecedented policy support to workers and firms. This paper provides evidence and stylised facts about labour market tightening and labour shortages since the onset of the pandemic.

The capacity of workers to move regions in response to local economic shocks is one key dimension of labour market dynamism which could contribute to the recovery from the COVID-19 crisis. In this context, this paper proposes articulating structural with place-based policies to help prospective movers as well as stayers.