Michele Raitano (Sapienza University of Rome)
Francesca De Matteis, Giovanni Marin and Francesco Vona
This paper studies the impact of the EU Emissions Trading Scheme (EU-ETS) on individual careers and earnings trajectories of workers in Italian manufacturing sectors over two decades (2000-20219). Using administrative matched employer–employee data and two-stage matching techniques, we find that EU-ETS workers experience a modest long-term gain (+9.3\%) in terms of annual wages. Workers in EU-ETS firms experience higher weekly wages, more weeks worked, lower probability to change job and greater job stability compared to matched workers. Firm characteristics play an important role explaining the advantage of ETS-workers: i. leaving an ETS firm brings to earnings losses, especially for those finding a job in the same sector; ii. effects on stayers are more pronounced, including on the AKM firm effect; iii. the aggregate effect is driven by sectors where grandfathering is more prevalent. Finally, high-skilled workers, with arguably better outside options, are able to obtain a larger share of the rents generated by the EU-ETS.