Identifying labour market bottlenecks in the energy transition: a combined IO-matching analysis

Abstract

This paper combines an input–output model and a novel regional labour market matching model in order to identify potential bottlenecks in regional labour markets resulting from shocks in demand caused by the energy transition. Identifying these bottlenecks provides relevant information for policymakers to determine in which regions and industries policy intervention in labour markets may be needed to ensure a smooth transformation. We analyse the effects of a shock that is illustrative for the energy transition in the Netherlands. Our results indicate that the aim of the Dutch government to substantially reduce greenhouse gas emissions may, at least in the short run, be hampered by bottlenecks in labour markets.