Matching Geographies and Job Skills in the Energy Transition
This working paper develops and implements a tool to help policymakers understand the localized opportunities and challenges that the US energy workforce may face in the years ahead.
Driven by technological innovation, public policy, and other factors, the US energy system is facing rapid changes, raising concerns over potential job losses, particularly among fossil fuel workers. Because there will be considerable variation across the United States in the employment impacts of a changing energy landscape, policies must be tailored to local contexts. This analysis develops and implements a tool to help policymakers understand the localized opportunities and challenges that the US energy workforce may face in the years ahead. We first identify the exposure of local labor markets to job displacement in fossil fuel extraction, transportation, processing, and electricity industries. We then develop an empirical framework that assesses the extent to which the skill sets of existing fossil energy workers are a good match for growing job opportunities with similar pay in their local labor markets. We document substantial differences across local labor markets in terms of the demographics of local fossil fuel workforces, the skills they have attained from their current work, and how well these skills align with those in demand locally over the coming decade. We find that, with the exception of technical skills, the skills important to fossil fuel jobs typically are not the same as those necessary for fast-growing occupations with similar levels of pay, many of which require extensive service-oriented and management skills. Our methodology and associated analytical tools can be readily used to provide locally tailored information about skills gaps between the existing fossil energy workforce and in-demand sectors, suggesting areas where workforce development may bear the most fruit.
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