EMPLOYMENT IMPACT OF CLEANER PRODUCTION ON THE FIRM LEVEL: EMPIRICAL EVIDENCE FROM A SURVEY IN FIVE EUROPEAN COUNTRIES

Abstract

This paper analyses the determinants of employment reactions of firms where environmentally friendly innovations (eco-innovations) were carried out. The data stem from a telephone survey covering more than 1500 firms in five European countries that have recently introduced eco-innovations. We found that product and service innovations create more jobs than process innovations. Moreover, employment impacts differ depending on the intended goals of the innovations. If products and processes are motivated by the goal of cost reduction, they tend to reduce employment. If they are motivated by market share goals, effects can be positive or negative depending on the success of the strategy the firm is following. With respect to skill-biased technogical change, eco-innovations do not differ from other innovations. So, environmental innovations have a small but positive net effect on employment. Thus, environmental support programmes do not counteract labour market policy. A further shift from end-of-pipe technologies to cleaner production, especially towards product and service innovations, would be beneficial for the environment and create jobs.