The impact of electricity prices on European manufacturing jobs

Increased investment in clean electricity in combination with a rising cost of carbon will most likely lead to higher electricity prices. We examine the impact from changing electricity prices on European manufacturing employment and find a negative elasticity for the most electricity-intensive sect...

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Bibliographic Details
Published in:Applied economics 2022, Vol.54 (1), p.38-56
Main Authors: Bijnens, Gert, Konings, Jozef, Vanormelingen, Stijn
Format: Article
Language:English
Subjects:
Economic analysis
Economic theory
Electricity
Electricity prices
Employment
labour demand
Manufacturing
manufacturing industry
Policy making
Prices
Public opinion
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Summary:Increased investment in clean electricity in combination with a rising cost of carbon will most likely lead to higher electricity prices. We examine the impact from changing electricity prices on European manufacturing employment and find a negative elasticity for the most electricity-intensive sectors. Since these sectors are unevenly spread across countries and regions, the negative employment impact from increasing electricity prices will also be unevenly spread. Policymakers should be well aware of this and take mitigating actions to ensure a positive public sentiment towards environment-related price increases. (JEL J23, H23, Q28, Q43)
ISSN:0003-6846
1466-4283
DOI:10.1080/00036846.2021.1951647