Heikensten, E. (2013). Do Green Subsidies Increase Employment? [MSc thesis] London: London School of Economics.
Abstract: All across the globe there is an increasing focus on policy design to reduce climate change. In Sweden billions of Swedish kroner (SEK) are spent on subsidies to private firms with the purpose of contributing to a greener economy. However, rigorous econometrical evaluations of such programmes are limited. This paper aims to fill that gap by analysing the effects of 13 subsidy schemes set up to stimulate green growth. Between 2001 and 2009, 129 firms participated in one or several of these schemes. The total amount of money distributed amounted to over 1,3 billion SEK. Since the programmes aim to increase sustainable growth, effects on employment are in focus. By conducting a propensity score matching (PSM) followed by a set of different econometrical models, it is concluded that the subsidy schemes have insignificant or very small effects on employment.