Working towards an environmentally sustainable and equitable future? New evidence on green jobs

This Data Insight by ADR UK Fellow, Damian Whittard, explores employment in green jobs in England and Wales. The article considers who is working in a green occupation and calculates if there is a pay benefit for doing so.

Given the urgency of the transition to net-zero, there is a need for a robust evidence base to support green policy interventions. Intelligence in relation to green jobs, however, is partial and fragmented, driven in part by the lack of an international consensus on definition and its effect on data collection. Damian's Data Insight contributes new evidence to explore green employment in England and Wales by linking O*NET data to de-identified data from the newly linked ASHE- 2011 Census dataset.

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Background

The climate crisis and environmental emergency is potentially the greatest challenge faced by the global community. International governments have set ambitious plans to transform to a net zero economy, with the UK targeting 2050.

Green jobs are at the core of this transition and have an important role in delivering environmental management strategies that promote sustainable economic development. This evolution provides an opportunity to address embedded labour market inequalities to support a fair and just transition.

To do so, government and businesses need to develop policies and strategies based on a robust and reliable evidence base, which at present is lacking. Green jobs have the potential to serve as a catalyst for social equity, but little is known about how the transition is impacting different groups.

Evidence indicates that male, white, full time, and individuals working for small and medium sized enterprises or foreign owned companies are more likely to work in green occupations. There is also a substantial pay premium for those that do, which reduces the overall gender and ethnic pay gap. However, gender and ethnic pay gaps persist within green occupations. The results suggest that, to have a fair and just transition, interventions may be required to address the dual inequality of opportunity and pay in green occupations, before they become embedded.

What we did

Linking O*NET data to ASHE- 2011 Census dataset enabled us to identify green jobs by occupation. We mapped United States O*NET data on US green tasks and occupations to that on UK occupations using the “LMI for All” crosswalk, a tool developed in the UK to facilitate the comparison of labour market information (LMI) across different occupational classifications.

The mapping allowed us to identify jobs which were either directly or indirectly green. The analysis compared:

• the effect of gender and ethnicity on likelihood of being in a green job
• raw pay gap: the difference between average pay for green and non-non green jobs
• adjusted pay gap: the difference between average pay for green and non-non green jobs, while controlling for all other observable characteristics.
• gender and ethnic pay gap for those working just in green occupations.

Why it matters

The identification of a pay premium in green occupations suggests that these jobs are not only vital for environmental sustainability, but are also becoming economically sustainable and desirable. This can help shift public perception of green jobs from being "alternative" or "niche" roles to mainstream career paths that offer competitive or even superior compensation. For policymakers, this finding can justify more robust support and investment in the green economy, leveraging economic incentives to meet environmental goals. Moreover, for businesses, it emphasises the importance of aligning business practices with sustainability goals to attract talent and capital in an increasingly eco-conscious market environment.

The greening of the economy offers the potential for a more inclusive and just transition. That said, policymakers should note the dual inequality that green occupational employment appears to engender. Not only are female and ethnic groups underrepresented in green employment, but when they are employed in green jobs, they are paid less than their counterparts. Further research is needed to explore the mechanisms through which this occurs, and policies put into place to mitigate this.