Renewable Energy as an Employment Policy Tool

Growing renewable energy sector is generally offered as a high and positive employment opportunity. The underlying cause of this argument is mainly the high direct employment potential of the sector. However it would be insufficient and misleading to consider only direct employment effect of the sector. What really matters is the net employment effect, which is the sum of direct, indirect and induced employment. In this study a panel data analysis of 59 countries, spanning the period 1991-2014, is conducted in order to determine the net employment effect of renewable energies. The impact of renewable energy on overall employment and youth employment is being addressed comparatively. The results show that renewable energy is negatively related to the employment rate. Also it is seen that youth employment is more negatively affected. A number of mechanisms triggered by the high cost of renewable energy might have led to this result. Therefore, it can be said that positive employment effect of renewable energy is not guaranteed by default. But it can turn into a real opportunity in terms of labor market, as long as renewable growth is supported by right employment and education policies