Employment Responses to Increased Biodiversity Transition Risk
Duc Duy Nguyen, Huyen Nguyen, Trang Nguyen, Vathunyoo Sila
IWH Discussion Papers,
No. 20,
2025
Abstract
This paper examines how firms adjust the number and types of workers they hire in response to increased biodiversity transition risk. Using the adoption of the Key Biodiversity Areas Standard of 2016 as a source of variation that increases the risk of future land-use restrictions, we find that firms reduce job postings in affected areas and reallocate labor to less exposed regions. This effect is concentrated among firms that make negative impacts on biodiversity. Cuts are stronger among production roles, while hiring in green and adaptive occupations increases. The effect is not driven by changes in capital investment or workers’ labor supply decisions. Our findings contribute to the ongoing debate on the costs and benefits of biodiversity conservation policies and their implications for labor market outcomes.
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