The OECD Employment Outlook provides an annual assessment of key labour market developments and prospects in OECD member countries. Each edition also includes several chapters that focus on specific aspects of the functioning of labour markets and the implications for policies to promote more and better jobs. The 2024 edition of the OECD Employment Outlook examines the characteristics of the jobs that are likely to thrive because of the net-zero transition, including their attractiveness in terms of job quality, and compares them with jobs in high-emission industries that tend to shrink. The cost of job displacement in these latter industries is assessed along with the trajectories of workers from these industries to new opportunities, and the labour market policies that can facilitate job reallocation. The distributive impact of climate change mitigation policies is also examined. The first chapter assesses recent labour market developments, but also provides an update of the OECD Job Quality indicators.

At its core, the green transition to an environmentally sustainable society is a political choice. The 2015 Paris Climate Agreement was the moment the world came together to make that choice, responding to the most urgent public policy challenge of our time. Nearly a decade later, we know that reversing climate change will require many more such choices – at the local, national and international levels. It has also become clear that safeguarding the planet must include a simultaneous commitment to taking care of people affected by the green transition.

Labour markets have continued to perform strongly in the past year, with many OECD countries seeing historically high levels of employment and low levels of unemployment. In most countries, employment rates improved more for women than for men, compared to pre‑pandemic levels. With few exceptions, labour force participation rates continued to increase, especially among older adults. Labour market tightness is easing but remains generally elevated.

This chapter provides an overview of recent labour market developments, with a focus on wage dynamics. The resilience of OECD labour markets is analysed, focussing especially on the evolution of labour market tightness and gender gaps. Real wage growth, including at the minimum wage, is also examined and compared with the dynamics of profits, to investigate whether the latter have started to buffer some of the increases in labour costs as wages recover their purchasing power. Beyond wages, the chapter also provides an update of the three key indicators of the OECD job quality framework across countries.

The policies that OECD countries are adopting to achieve net-zero greenhouse gas emissions by 2050 will have a significant impact on labour markets: jobs in high-emission industries will be reduced, new opportunities will emerge in climate‑friendlier sectors, and many existing occupations will be transformed. Climate change itself will affect labour demand and working conditions, mainly through rising temperatures and more frequent extreme weather events. This chapter focuses on the jobs that are likely to thrive because of the net-zero transition and compares them with jobs concentrated in high-emission industries. In addition to looking at the characteristics of the workers who hold these jobs and where they are located, the chapter delves into the quality of these jobs by analysing their wages, labour market security and quality of the working environment.

The net-zero transition will create new job opportunities in low-emission activities but also increase the risk of job loss in high-emission activities. Concerns about job loss are understandable given the persistent earnings losses associated with displacement. In addition, these concerns risk undermining public support for climate change mitigation policies. Developing effective policies to support displaced workers is therefore not only crucial to alleviate the consequences of job displacement but also to ensure that concerns about job loss do not result in a backlash stalling progress towards net-zero emissions. To inform the development of such policies, this chapter provides an in-depth analysis of the consequences of job displacement in high greenhouse gas (GHG) emission industries using harmonised linked employer-employee data from 14 OECD countries and provides a detailed discussion of policies to support workers who lose their job as a result of the net-zero transition.

Analysing skills in the context of the net-zero transition is crucial as it helps identify mismatches between existing workforce competences and those demanded by emerging green activities. Addressing these gaps through training and education ensures a smoother transition, but policies need to be carefully designed. To this end, this chapter explores the skill requirements of occupations playing a key role in the net-zero transition and compares them with those of emission-intensive jobs. Skill distances between different types of occupations are also examined to identify feasible job transitions and relevant retraining needs. Finally, good practices in designing and implementing targeted policies to foster skills for the green transition are examined.

Carbon pricing incentivises a reduction in emissions and is one of the key climate change mitigation policies. It may raise a number of concerns, however, not least in the context of recent inflation surges and the energy crisis brought about by Russia’s war of aggression against Ukraine. A key concern is that carbon pricing measures may have adverse distributional consequences, which in turn can hinder support for necessary climate change mitigation action. This chapter estimates the carbon content of households’ consumption baskets and examines how higher carbon prices alter household budgets and consumer prices – and therefore the real value of workers’ wages. It examines whether carbon pricing measures are regressive and explores how burdens differ across groups, including disadvantaged ones. Based on the distributional impact and associated carbon price revenues, the chapter considers the scope for offsetting household burdens by channelling revenues back to households in the form of income transfers.

The tables of the statistical annex show data for all 38 OECD countries where available. Data for Argentina, Brazil, China, India, Indonesia, Peru, South Africa and non-OECD EU Member States are also compiled and included in a number of datasets.