During the SkiLMeeT research webinar Ceren Ozgen showed that Japanese workers in environmentally friendly roles earn, on average, 7.8% more than their counterparts in non-green jobs, highlighting the rising demand for new skills and the existence of green wage premium.
At the event, which took place on 30 January 2025 and gathered 23 participants, Ozgen discussed key findings from the study “Green Wage Premium: Worker-Level Evidence for Japan”, co-authored with Wenjing Kuai, Robert J. R. Elliott, and Toshihiro Okubo.
The researchers were interested in how the acceleration of the transition to a green economy transforms the workforce in Japan and ran a survey to grasp the greenness of jobs.
Worker-level data show that the more time workers spend on green tasks, the higher their wages. A 10% increase in green task intensity (KEOO index) is linked to a 0.8% wage increase.
The research revealed that the scale of wage premium depends on skill level, gender, and age. However, tasks performed matter more than education or tenure; low-skilled workers engaged in tasks with high green intensity earn the highest wage premiums. Large wage gains are also seen among young employees. Men in green jobs receive a slightly higher wage premium than women, reflecting job roles and unique qualities of labour market in Japan in terms of women’s workforce participation.
With salaries playing a crucial role in career decisions, researchers suggest that the green wage premium could make environmentally focused jobs more attractive, attracting more workers. This, in turn, could speed up the shift towards a more sustainable economy.
However, questions remain over whether this premium will last. As the supply of green-skilled workers increases, wages may eventually stabilise. Future research will be needed to determine whether green premiums are a long-term trend or a temporary response to a limited supply of green skills.
You can access the presentation here
