At the coalface: What happens to workers displaced by decarbonisation?

by Dan Andrews, Elyse Dwyer and Lachlan Vass

The shift to a net zero economy brings great advantages, but managing transition costs, like job displacement, is critical. While the direct impact on jobs in coal-fired power plants may be relatively small in a dynamic labour market, the localised impacts of these closures and the political salience they have may motivate additional government intervention.

We use microdata, to compare the earnings of coal-fired power plant workers made redundant to the broader labour market, to demonstrate the value of microdata in shaping future structural adjustment policies as plant closures loom.

While our findings aren’t causal, they highlight three key patterns:

  1. Redundant workers experience a substantial earnings drop in the year after redundancy, earning 43% less.
  2. Coal-fired power plant workers face an even larger earnings decrease, with a 69% drop in earnings in the year following redundancy.
  3. Relative earnings losses persist over time: after four years, coal-fired power plant workers earn 50% less, compared to 29% for other workers.