Environmental Regulation and Green Skills: An Empirical Exploration

Abstract

This paper provides new evidence on the workplace skills most relevant in the transition toward environmentally sustainable economies. Using a novel data-driven methodology, we identify two main sets of green skills, namely, engineering skills for the design and production of technology, and managerial skills for implementing and monitoring environmental organizational practices. Exploiting exogenous geographical variation in regulatory stringency, we also evaluate the effect of environmental regulation on the demand of green skills for a panel of US metropolitan and nonmetropolitan areas over the period 2006–14. The main finding is that while these changes in environmental regulation have no impact on overall employment, they create significant, if modest, gaps in the demand for some green skills, especially those related to technical and engineering work tasks.