The Employment Impact of Green Fiscal Push: Evidence from the American Recovery Act (No. w27321) (Popp et al., 2020)

Study Profile What's in a study profile?
Causal Evidence Rating:
Moderate Causal Evidence
Study Type:
Causal Impact Analysis
Outcome Findings:
Employment: Mod/high-Favorable impacts
Citation
Popp, D., Vona, F., Marin, G., & Chen, Z. (2020). The Employment Impact of Green Fiscal Push: Evidence from the American Recovery Act (No. w27321). National Bureau of Economic Research.

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There is no conflict of interest.

Highlights

  • The study's objective was to examine the impact of the green initiatives under the American Recovery and Reinvestment Act (green ARRA) on employment.
  • The study used a nonexperimental design. Data were obtained from reports submitted to the federal government, the Bureau of Labor Statistics (BLS), the American Community Survey (ACS), and O*NET. The authors used statistical models to compare changes in employment given ARRA funding specific to the green economy (green ARRA).
  • The study found that green ARRA investments positively impacted employment both in the short- and long-term. They significantly increased employment in the green and manufacturing industries in the long-term, as well as increased short-term and long-term employment for manual workers with more than a high school education.
  • This study receives a moderate evidence rating. This means we are somewhat confident that the estimated effects are attributable to the green initiatives under the American Recovery and Reinvestment Act (green ARRA), but other factors might also have contributed.

Intervention Examined

The American Recovery and Reinvestment Act (ARRA)

Features of the Intervention

The American Recovery and Reinvestment Act (ARRA) was enacted in 2009 to address the Great Recession. Of the approximately $350 billion in direct government spending, approximately 17% was directed at promoting the green economy and creating green jobs. ARRA facilitated partnerships between federal agencies, state and local governments, nonprofits, and private companies to fund projects that focused on keeping people employed or getting them back to work. ARRA was intended for projects that could quickly generate jobs, such as highway construction, and school funding to retain teachers and staff. The green initiatives under ARRA included funding for clean vehicles, clean energy, clean drinking water, public transportation, electrical grid modernization, Superfund site clean-up, and the expansion of the Weatherization Assistance Program, among others.

Features of the Study

This study used a nonexperimental design to examine employment outcomes over time in relation to green ARRA funding. The analysis covered the years before ARRA (2005-2007), short-term impacts (2009-2012), and long-term impacts (2013-2017). The study authors identified ARRA projects associated with the Department of Energy (DOE) and the Environmental Protection Agency (EPA) as green initiatives. They also included projects managed by divisions within these larger agencies.

The authors used multiple data sources, including reports submitted to the federal government between 2009 and 2012, the Bureau of Labor Statistics (BLS), the U.S. Census Bureau’s American Community Survey (ACS), and O*NET. Information on ARRA contracts, grants, and loans was sourced from archived data. Employment information was gathered from the BLS Quarterly Census of Employment and Wages and the ACS. County-level data were grouped into Commuting Zones (CZs) using the 2000 U.S. Census. After removing CZs with populations less than 25,000 in 2008 and excluding the CZ for New Orleans due to Hurricane Katrina, the study included 587 CZs. The authors used statistical models to compare changes in employment given green ARRA funding.

Findings

Employment

  • The study found that green ARRA investments positively and significantly impacted employment both in the shorter and longer term. Specifically, compared to 2008, per capita employment increased by 0.215% in the 2009-2012 time period and increased by 0.523% in the 2013-2017 time period.
  • The study found that green ARRA investments did not significantly impact short-term employment in green or other industries, but significant positive increases were found in the green and manufacturing industries in the long-term.
  • The study found that green ARRA investments significantly and positively impacted both short-term and long-term employment for manual workers with more than a high school education; however, the impacts on manual workers with a high school degree or less were not statistically significant.

Causal Evidence Rating

The quality of causal evidence presented in this report is moderate because it was based on a well-implemented nonexperimental design. This means we are somewhat confident that the estimated effects are attributable to green ARRA, but other factors might also have contributed.

Reviewed by CLEAR: May 2026

Research Guidelines

Review Protocol: Living Systematic Annual Search and Review Protocol

Review Guidelines: Causal Evidence Guidelines