Impacts of circular economy policies on the labour market

Impacts of the circular economy policies on labour market

Cambridge Econometrics
Publication Date
May, 2018
Language for original content
Juan Perez Lorenzo

How does a transition to a more circular economy affect jobs and skills demand in Europe?

This report looked at trends of circular economy activities across different sectors and quantified these activities as modelling inputs to provide employment changes for different sectors. The analysis also provides estimates of the occupational shifts and skills requirements that a shift to a more circular economy could entail.

The aim of this report is to develop an understanding of how a transition towards a more circular and resource efficient economy in Europe will affect labour markets across the Member States. Our analysis is the most comprehensive quantification of the EU jobs impacts from the circular economy to date. By using a fully integrated energy-environment-economy model (E3ME), our analysis considers both direct job losses and job creations that result from a shift to a more circular economy. It also captures indirect, induced and rebound impacts from interactions between sectors, Member States, and between economic, environment, material, energy and labour market indicators.

Our findings suggest that the EU is on the right track by making the circular economy a policy priority as circular economy policies will contribute to reducing negative environmental impacts, while simultaneously contributing to higher employment levels. By moving towards a more circular economy, GDP in the EU increases by almost 0.5% by 2030 compared to the baseline case. The net increase in jobs is approximately 700,000 compared to the baseline through additional labour demand from recycling plants, repair services and rebounds in consumer demand from savings generated through collaborative actions Although the magnitude of job creation is driven by our assumption of the rate of circular economy uptake in the scenarios, our analysis confirms that it is possible to become more resource efficient and increase employment at the same time.