This paper analyses the determinants of employment reactions of firms when environmental innovations have been carried out. It differentiates hereby between employment increases and decreases. The data stem from a telephone survey covering more than 1500 firms in five European countries that have introduced environmental innovations recently. Environmentally beneficial product and service innovations create jobs in contrast to process innovations. Employment changes occur in the wake of major innovations only and especially in small firms and firms with positive sales expectations. While innovations purely motivated by environmental goals tend not to have employment effects, cost reductions envisaged by environmental innovations reduce employment. We detect skill biased technological change of environmental innovations.
Rennings, Klaus and Thomas Zwick (2001), The Employment Impact of Cleaner Production on the Firm Level: Empirical Evidence from a Survey in Five European Countries, ZEW Discussion Paper No. 01-08, Mannheim. Download