Changes in labour market in the

context of green economy

implementation

Dr. G. Liobikienė
Content:

• Causes and types of unemployment;

• Not typical employment forms;
• Growth of employment;
• Labour market policy and problems;
• The impact of green economy on creation of
new jobs;
• Green investments and technologies.
 Unemployment:
• The broad definition accepts as unemployed
those who report being available for work and
say they would accept if a suitable job were
offered.
• The cost of unemployment is divided into two
aspects namely: the economic and non-
economic costs. The economic cost is the loss of
output of workers who are unproductive and the
non-economic cost leads to socio-economic
issues such as the high level of crime and labour
unrest.
Causes of unemployment:
• Performance issues - If a person lacks the skills to perform their duties on the
job, is tardy or absent from work often, or is involved in personality conflicts with
co-workers or management, he or she may be let go from employment;
• Economic conditions - In a situation where a company needs to cut costs, it may
decide to offer employees an incentive to take early retirement or lay them off
altogether. A person on temporary layoff from work and waiting to be recalled
back to work can be considered unemployed;
• Mismatch between available workers and positions to be filled - When there
are more workers available than positions to be filled, unemployment rates for
will rise. When there are positions waiting to be filled, but available workers
don't have the necessary training or skills to do the jobs, unemployment rates
will be higher than when there is a surplus of available job openings compared to
people looking for work;
• Lack of experience - Unemployment rates among young people tend to be
higher than for other segments of the population. This is due to a lack of
experience which makes it more difficult for them to find jobs, and they can't
gain the practical experience they need unless they can find someone willing to
hire them;
• Voluntary unemployment - There are some people who are between jobs
because of choices they have made. They may have resigned from a job in
anticipation of a move to another location before they have another job lined up
or be planning to return to school.
Main types of unemployment
• Frictional unemployment - Unemployment that arises out of the
transition of an individual from one job to another is known as
frictional unemployment. Frictional unemployment can be
attributed to the lack of information in the labour market.
Frictional unemployment has a relatively short duration which can
be reduced further by improving labour market information and
placement services, so that the employer and the job-seekers can
find each other sooner and more effectively.

• Cyclical unemployment - happens when there is inadequate

cumulative demand in the economy for employment for everyone
who seeks work. Because the demand for most goods and services
decline, less production is and fewer workers are required,
remuneration is lower and mass unemployment occurs.

• Structural unemployment - this type of unemployment happens

when there are not sufficient jobs to maintain the people who are
trained in a particular sector of the economy.
Economic growth and unemployment

• Economic growth plays a fundamental role in job creation.

Increased economic activity is largely associated with
creating jobs and increasing the standard of living of many
people. However, not all growth is necessarily job
absorbing.
• Unemployment may exist even when the economy is at
full sustainable capacity due to difficulties in matching job
seekers and job vacancies.
• Due to structural changes in the economy, it is possible
that stimulatory policies could produce short-run increases
in growth without any significant effect on
unemployment. Short-run increases in growth can lead to
an increase in aggregate demand and total production,
which can reduce the natural rate of unemployment.
Unemployment, inequality, poverty and health
• High levels of poverty and inequality can be directly linked
to the country’s unemployment crisis. Poverty is clearly
prevalent and is evidenced by shacks, homelessness,
unemployment, poor infrastructure and lack of access to
basic services.
• Being unemployed can also result in other mental and
emotional effects, particularly if one has been unemployed
for long periods.
• Unemployment could lead to poor health include:
a) effects of increased poverty and material deprivation.
These can be particularly acute for people in manual
occupations, who tend to be on lower incomes anyway.
b) Social exclusion, isolation and stigma.
c) Changes in health-related behaviour.
d) Disruption to longer term careers.
Non typical forms of employment:
• In recent decade non typical forms of
employment become more popular:
– remote work,
– work not all day.

Non typical forms of employment can enhance the

flexibility of labour market and contribute to the
growth of employment rate. In other hand this
changes can harm the social security of individuals
and general social security system.
Determinants which influence the growth of
employment:

• - structure of labour force demand;

• -amount of allowance;
• - concentration of the unemployed people;
• - level of poverty.
Labour market policy
• Labour market institutions are deemed to have a great influence on the level
and structure of employment, i.e. the number and the type and quality of
jobs available.

Labour market policy can be described as public interventions in the labour

market aimed at reaching its efficient functioning and correcting disequilibria
and which can be distinguished from other general employment policy
interventions in that they act selectively to favour particular groups in the labour
market.

Interventions are divided into measures, services and supports:

a) Services and measures are characterised as active labour market policy and
refer to labour market interventions, where the main activity of participants is
job-search related and measures refer to activities which constitute a full-time or
significant part-time activity of participants during a significant period of time
with the aim is to improve the vocational qualifications of participants, or the
intervention provides incentives to take-up or to provide employment (including
self-employment).
b) financially supports as passive labour market policy.
 A basic framework for active labor market policies
• Training programs—the classic active labor market policy—are the most frequently implemented labor
market programs worldwide. Training programs comprise all programs aimed at increasing human capital.
The goals of boosting human capital and attenuating skills mismatch are attained through a set of training
components: classroom vocational and technical training, work practice (on-the-job training), basic skills
training (math, language), life skills training (socio-affective, noncognitive skills), and job insertion.

• Private sector incentive programs - some labor market interventions create incentives that aim to alter
employer or worker behavior. The most common of these programs is wage subsidies. Self-employment
assistance is another type of subsidized private-sector employment program. Unemployed individuals who
start their own business can receive grants or loans and sometimes advisory support for a fixed period of
time. The main purpose of these programs is to improve the job-matching process and increase labor
demand. There is also typically some limited human capital accumulation through work practice, and a
culturization effect as participants get accustomed or re-accustomed to having a job.

• Direct employment programs in the public sector - some active labor market programs focus on public works
or other activities that produce public goods or services. These measures are typically targeted to the most
disadvantaged people, with the aim of keeping them engaged in the labor market and avoiding a loss of
human capital during a period of unemployment. To some extent, these programs may also increase labor
demand. Also, they can serve as a safety net (programs of last resort). Government costs are typically high.

• Job-search assistance – some labor market programs are designed to improve job-seeking skills and the
efficiency of the search process and resulting job matches. Components typically include job search training,
counseling, monitoring, and sanctions for failure to comply with job search requirements.
Programmers of active labour market policy
• Intensive counselling and job search assistance - programmes which assist the job
search process through intensive, individualised counselling and which are targeted to
persons registered as unemployed job seekers experiencing special difficulties in
getting a job, or other groups with difficult access to the labour market.
• Training - programmes which aim to improve the employability of the unemployed
and other target groups through training, and which are financed by public bodies.
Measures included here should include some evidence of classroom teaching, or if in
the workplace, supervision specifically for the purpose of instruction.
• Job rotation and job sharing - programmes that facilitate the insertion of an
unemployed person or a person from another target group into a work placement by
substituting hours worked by an existing employee.
• Employment incentives - programmes which facilitate the recruitment of unemployed
persons and other target groups, or help to ensure the continued employment of
persons at risk of involuntary job loss. The majority of the labour cost is normally
covered by the employer.
• Integration of disabled - programmes that aim to promote integration of disabled
persons into the labour market.
• Direct job creation - programmes that create additional jobs, usually of community
benefit or socially useful, in order to find employment for the long-term unemployed
or persons otherwise difficult to place. The majority of the labour cost is normally
covered by the public finance.
• Start up incentives - programmes that promote entrepreneurship by encouraging the
unemployed and target groups to start their own business or to become self-
employed.
Functions of active market policy:
– Career activation of unemployed people;
– Reduction of imbalance structure in labour
market;
– Growth of efficiency of labour fource;
– Regulation of employment and unemployment
rate;
– control of unemployed people preparation to
participate in labour market.
 Programmers of passive market policy
• Out of work income maintenance and support - programmes which
aim to compensate individuals for loss of wage or salary through the
provision of cash benefits when:
• a person is capable of working and available for work but is unable to
find suitable employment.
• a person is on lay-off or enforced short-time work or is otherwise
temporarily idle for economic or other reasons (including seasonal
effects).
• a person has lost his/her job due to restructuring or similar
(redundancy compensation).

• Early retirement - programmes which facilitate the full or partial

early retirement of older workers who are assumed to have little
chance of finding a job or whose retirement facilitates the placement
of an unemployed person or a person from another target group.
Design features that help to maximize the benefits of employment
incentives include:

• - targeting the unemployed who have limited chances for

employment (e.g. long-term unemployed to minimize the risk of
deadweight loss), but also groups with a considerable potential
increase in productivity (e.g. young people without work
experience who have been unable to find a job within a certain
time),
• - ensuring that the subsidized period increases the productivity of
the worker, e.g. through an effective training component and
coaching,
• - introducing conditions aimed at increasing the probability of an
extension of the employment relationship beyond the subsidized
period (e.g. checks that the beneficiary is still employed by the
firm at a certain point in time after the expiration of the subsidy,
and/or having gross or net job creation in the firm),
• - regular monitoring and assessment of subsidized firms and their
hiring behaviour as well as of beneficiary workers.
 EUROPE 2020 STRATEGY – A NEW LINE OF
OF GROWTH AND EMPLOYMENT
The Europe 2020 Strategy sets five key objectives:

• - Achieving an employment rate of 75% of the population aged between

20 and 64;

• - Investing in research and development amounting to 3% of the

European GDP;

• - Meeting the targets for climate and energy (defined as "20/20/20");

• - Reducing the share of early school leavers below 10% and reaching
40% share of graduates;

• - Reducing by 20 million the number of people living at risk of poverty.

The four integrated guidelines that address specifically the employment
policy set the following objectives:

• - Increasing labour market participation of both men and women,

reducing structural unemployment, and promoting job quality
(Guideline 7);

• - Developing a skilled workforce responding to labour market needs,

promoting job quality and lifelong learning (Guideline 8);

• - Improving the performance of education and training systems at all

levels and increasing participation in tertiary education (Guideline 9);

• - Promoting social inclusion and combating poverty (Guideline 10).

Rio 2020 document stated that..
• We are concerned about labour market conditions and widespread deficits of
available decent work opportunities, especially for young women and men.
We urge all governments to address the global challenge of youth
employment by developing and implementing strategies and policies that
provide young people everywhere access to decent and productive work, as
over the coming decades, decent jobs will need to be created to be able to
ensure sustainable and inclusive development and reduce poverty.

• We recognize that workers should have access to education, skills, health care,
social security, fundamental rights at work, social and legal protections,
including occupational safety and health, and decent work opportunities.
Governments, trade unions, workers and employers all have a role to play in
promoting decent work for all, and all should help young people to gain access
to needed skills and employment opportunities, including in new and
emerging sectors. Women and men should have equal access to opportunities
to acquire job skills, as well as to worker protections. We recognize the
importance of a just transition, including programmes to help workers to
adjust to changing labour market conditions.
Green jobs
• Green jobs are central to sustainable development and respond to the global
challenges of environmental protection, economic development and social
inclusion. By engaging governments, workers and employers as active agents of
change promotes the greening of enterprises, workplace practices and the
labour market as a whole. These efforts create decent employment
opportunities, enhance resource efficiency and build low-carbon sustainable
societies.
• Green jobs according to the United Nations Environment Program is "work in
agricultural, manufacturing, research and development (R&D), administrative,
and service activities that contribute(s) substantially to preserving or
restoring environmental quality. Specifically, but not exclusively, this includes
jobs that help to protect ecosystems and biodiversity; reduce energy, materials,
and water consumption through high efficiency strategies; de-carbonize the
economy; and minimize or altogether avoid generation of all forms of waste and
pollution." The environmental sector has the dual benefit of mitigating
environmental challenges as well as helping economic growth.
• These definitions include jobs which seek to use or develop renewable forms of
energy (i.e. wind, hydropower, geothermal, wind, landfill gas and municipal solid
waste) as well as increase their efficiency. Under the green jobs domain
education, training, and public awareness are also included. These jobs seek to
enforce regulations, support education, and increase public influence for the
benefit of the environment.
Green jobs help to:

• Improve energy and raw materials efficiency

• Limit greenhouse gas emissions
• Minimize waste and pollution
• Protect and restore ecosystems
• Support adaptation to the effects of climate
change
How ecological transformation will change the
map of employment?
1. Due to the new technologies and development of new sectors, new jobs
will be created.
2. Traditional sectors will increase due to the new orders – for example
metallic industry will increase the production of wind turbine.
3. Existing workplaces will be changed seeking sustainability.

Shift toward green jobs not only requires high quality specialists but
also promotes the low qualification workers. Moreover the
greening of sectors is only way to avoid the loss of workplaces. Only
the investments in energy efficiency and reduction of resource
consumption will preserve competition.
The International Labour Organication Green Jobs
Programme
The Green Jobs Programme has progressively assisted over 30 countries.
The Programme’s services include:

1. Knowledge creation by documenting experiences, conducting global, regional and

sectoral studies, and producing flagship reports and guidelines on the linkages
between labour and environmental issues.
2. Advocacy by building partnerships and engaging in dialogues and key negotiation
processes for increased international policy coherence.
3. Capacity building by providing stakeholders with opportunities to learn about key
green jobs concepts, suitable approaches, existing tools and best practices.
4. Diagnostics and prioritization by identifying economic sectors with high potential
for green job creation through national green jobs assessments;
5. Pilot projects whereby tools for sectoral and thematic approaches are developed
and tested such as green entrepreneurship, the greening of enterprises and local
development of infrastructure for adaptation to climate change.
6. Policy advice for the formulation and implementation of effective national or
sectoral policies that create green jobs, foster social inclusion and improve
sustainability;
7. Knowledge sharing so that others can learn from best practices and country
experiences.
The identification of green jobs according to areas such as:

 renewable energy, which creates more jobs than the traditional energy sector,
 the construction sector, which involves improving the methods and materials of
construction, heating, and ventilation, so as to increase energy efficiency,
 the transport sector, which requires a large consumption of fossil fuels and requires a switch
to other sources of energy/fuel,
 the recycling sector, which can reduce energy consumption and pollution by recycling
materials such as paper, iron, steel, and aluminium;
 the agricultural sector, which can contribute to the creation of green jobs through the
development of organic farming.
• Green employment is growing. Greater integration of
environment and climate concerns into energy and
training policies could make it even stronger, while
protecting our world.
Green jobs according to sectors
• Green growth will see new green sectors and activities develop and
new skills required of workers in both new jobs and existing jobs that
are re-engineered to become more environmentally friendly. Labour
market and skills development policies can make an important
contribution to greener growth. By minimising skill bottlenecks and
preventing a rise in structural unemployment, these policies can make
the transition to green growth quicker and more beneficial. By helping
workers to move from contracting to expanding sectors, they can also
assure a fairer sharing of adjustment costs arising from economic
changes accompanying the greening of growth.

• Green agriculture has the potential to be a net creator of jobs that

provides higher return on labour inputs than conventional agriculture.
Additionally, facilities for ensuring food safety and higher quality of
food processing in rural areas are projected to create new high quality
jobs in the food production chain. Modeled scenarios suggest that
investments aimed at greening agriculture could create 47 million
additional jobs in the next 40 years. Moreover for 1 hectare in organic
farms need 10-20 % more workers comparing with conventional
farms.
• Transport is fundamental to the functioning of
economies and it is also a key sector in its own right in
terms of generating employment, from manufacturing
vehicles to refining fuels, managing transport services
and developing and maintaining infrastructure. Under a
green economy, transport-sector jobs would increasingly
be those that are generated through investment in green
transport infrastructure and vehicles, alternative fuels
and telecommunication and other technologies. 1 billion
dollars investment will create 36 000 now jobs.

• A shift to renewable energy sources brings many new

employment opportunities. Due to the investments in
renewable energy resources will be created 2,1 mln new
jobs developing wind power, 6,3 mln - solar power and
12 mln bioenergy until 2030.
Workplace to create 1 megawatt:
Workplaces developing renewable energy production
Green jobs in renewable energy sector
Employment in energy sector
Green manufacturing

• By developing
green
manufacturing,
establishing green
and cleaner
technologies is
increased efficiency
which contributes
to creation of new
jobs.
Green tourism:
• By developing tourism is creating direct and
indirect workplaces. In the world 8 % people
work in tourism sector.

• Researchers evaluated that one created direct

workplace creates 1,5 indirect workplace.
The European Commission has established four
courses of action to promote green employment
policies and the creation of green jobs:

• - introduction of green employment policies in

national strategies
• - training skills needed in a green economy
• - use of financial instruments for smart green
investments
• - creation of partnerships between labour
market actors
Green investments
• Green investments are traditional investment vehicles (such as stocks, exchange-
traded funds and mutual funds) in which the underlying business(es) are somehow
involved in operations aimed at improving the environment. This can range from
companies that are developing alternative energy technology to companies that
have the best environmental practices.
FDI (foreign direct investments) has the potential to
deliver three types of greening effects:

• Transfer of clean technologies which are less

polluting to affiliates (e.g. end-of-pipe abatement)
and more input-efficient compared to domestic
production (―cleaner‖ technology),
• Technology leapfrogging, whereby FDI transfers
state-of-the-art production and pollution-control
technologies to affiliates (―cleanest‖ technology),
• Spillovers to domestic firms, whereby best
practices in environmental management are
transferred to affiliates and diffused to domestic
competitors and suppliers.
Investments in green energy:
Investments in green energy in EU:
 R&D and innovations
• Investments in R&D and in innovation undertaken by
firms are crucial inputs for success: they not only
provide critical knowledge-based assets for these
companies, but also strengthen their absorptive
capacities. Evidence confirms the positive effects of
these investments on firms’ innovation and
productivity performance.
Innovation is a process that has three different forms:
• technological innovations, providing specific
techniques for managing/ processing materials and
energy (e.g. the steam engine, hydrogen fuel cell,
micro-chip, or a process that achieves more with
less);
• institutional innovations for managing on a society-
wide basis – or even globally – incentives,
transaction costs, rents, benefit distribution,
dispersal, contractual obligations, precautions, and
individual obligations; and
• relational innovations for managing cooperation,
social cohesion, solidarity, social learning and
benefit sharing .
 Green technologies
• Green technology as the application of the environmental science to
conserve the natural and resources, and to curb the negative impact on
environmental impact.