Eco-innovations and labor in the European automotive industry: an econometric study
Working Paper CNR-Ircres 4/2023
Eco-innovations and labor in the European automotive industry: an econometric study
Anna Novaresio
CNR-IRCrES, National Research Council, Research Institute on Sustainable Economic Growth, Torino, Italy
corresponding author: anna.novaresio@ircres.cnr.it
Abstract
The present paper aims at providing a first comparative ex-post assessment of the extent to which different green technological patterns in the European automobile industry have impacted labor and its productivity not only among the original equipment manufacturers (OEMs), but also among the auto suppliers, by using a sample of 20 European countries inspected over the past 20+ years. The exploratory analysis highlight that while average employment in EU OEMs has been substantially stable until the dramatic drop in 2010, followed by a rapid recovery, the workforce in EU auto suppliers has experienced a slow, but steady decline. On the other hand, auto green patents show increasing average trends in all three categories over time, with BEVs displaying the most impressive growth pattern and peak in the last years. The results of our econometric analysis reveal that, while eco-innovations related to HEVs and BEVs show a statistically significant negative association with labor levels in the OEMs, the production of BEVs-related technologies, surprisingly, has a statistically significant positive effect on labor among producers of auto equipment, confirming the hypothesis of a labor shift from the OEMs to the suppliers’ ecosystem (e.g., batteries, electronics) postulated by Kupper et al., (2020). The analysis on labor productivity shows that innovations related to the electrification process have a positive effect on the OEMs labor productivity, suggesting that the labor demand reduction driven by cleaner technologies, has been compensated by major labor productivity. Our findings, which show how the electrification process has the potential for driving OEMs and suppliers to a “win-win” outcome, are substantially robust to a test in a dynamic model including past employment levels, which reveals that patenting activity in BEVs domain can actually steer a positive effect on jobs demand even among car manufacturers, backing the hypothesis that the transition to the electromobility may lead to more jobs in powertrain manufacturing formulated by Cotterman et al., (2022).
Keywords: just transition, eco-innovations, employment, labor productivity, automotive, Europe.
JEL Codes: J23, O31, O33, O25, O14.
DOI: 10.23760/2421-7158.2023.004
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How to Cite this Article
Novaresio, A. (2023). Eco-innovations and labor in the European automotive industry: an econometric study (CNR-IRCrES Working Paper 4/2023). Torino: CNR-IRCrES. Available at http://dx.doi.org/10.23760/2421-7158.2023.004