Effects of the Circular Economy on Jobs

This literature review by the International Institute for Sustainable Development (IISD) and Sitra examines the relationship between the transition to a circular economy and its impact on global and regional employment, emphasizing the need for 'decent work' and just transition policies.

• The circular economy is characterized by a shift from the linear 'take, make, waste' model toward systems that prioritize material efficiency, the reuse and recycling of materials, and the decoupling of economic growth from resource consumption and greenhouse gas emissions.
• Research suggests that circular economy production is more labour-intensive than linear production. The Club of Rome estimates that full adoption of a circular economy by 2030 would create significant job gains in several European countries: 500,000 in France, 400,000 in Spain, 200,000 in the Netherlands, 100,000 in Sweden, and 75,000 in Finland.
• The International Labour Organization (ILO) projects that changes in energy production—including renewable energy, electric vehicles, and building efficiency—could result in a net gain of 18 million jobs globally. A specific circular economy scenario by the ILO suggests that by 2030, the services and waste management sectors could grow by 50 million and 45 million jobs, respectively, compared to a business-as-usual scenario.
• The transition to a circular economy will cause significant shifts in employment by sector. The highest absolute job demand growth is expected in the reprocessing of secondary steel into new steel (30.8 million jobs) and retail trade/repair of household goods (21.5 million jobs). Conversely, the strongest absolute declines are expected in the manufacture of basic iron and steel (minus 28.2 million jobs) and the mining of copper ores and concentrates (minus 20.8 million jobs).
• While circular economy jobs can be environmentally beneficial, they are not automatically 'decent.' In Europe, waste management and recycling jobs are often low-wage with safety risks, and the construction sector in both developed and developing countries shows a trend toward hiring contract workers without unionization or regulation.
• Empirical evidence from specific regions shows positive correlations between circular initiatives and job growth. In Florida, a 1% increase in the recycling rate led to a 0.4% increase in direct circular economy jobs between 2000 and 2011. In the Netherlands, approximately 8% of the workforce is employed in circular economy jobs, with 42% of those roles focused on reuse and recycling.
• Effective transitions require social protection and skills development. For example, when China banned unsustainable logging, nearly 1 million state forest workers lost their jobs, but cash transfers and social protection helped two-thirds of them find new jobs or retire within four years.

APA

International Institute for Sustainable Development (2020). Effects of the Circular Economy on Jobs. https://www.iisd.org/system/files/2020-12/circular-economy-jobs.pdf

Chicago

International Institute for Sustainable Development. Effects of the Circular Economy on Jobs. 2020. https://www.iisd.org/system/files/2020-12/circular-economy-jobs.pdf.

Wikipedia

{{cite report |author=International Institute for Sustainable Development |title=Effects of the Circular Economy on Jobs |date=November 2020 |url=https://www.iisd.org/system/files/2020-12/circular-economy-jobs.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{internationalinstituteforsustainabledevelopment2020effects, author = {{International Institute for Sustainable Development}}, title = {{Effects of the Circular Economy on Jobs}}, institution = {International Institute for Sustainable Development}, year = {2020}, month = nov, url = {https://www.iisd.org/system/files/2020-12/circular-economy-jobs.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }