Socio-economic and volume effects of a circular value chain for clothing

Abstract

We investigate the socio-economic effects of further activating the circular value chain for clothing on the labour market in the Netherlands. We develop a value chain model to evaluate the direct gross effects of changes in production, consumption, and end-of-life activities and map the value chain, limited to the part of the clothing value chain that takes place within the geographical borders of the Netherlands. Further, we evaluate both the Dutch government's scenarios for a circular economy and a set of circular objectives that lead to an optimised projection for 2050. We find that the circular value chain for clothing can have positive effects on the Dutch labour market, including creating new jobs, and upscaling existing ones. Specifically, we evaluated the Dutch clothing value chain through “Rethink,” “Reuse,” and “Recycle” scenarios, which respectively reduced imports, increased job creation with potential price impacts, and prioritized waste minimization. Moreover, the optimisation results indicated that pursuing circular economy objectives boosted both gross and low-skilled labour demand, but a narrow focus on labour maximisation raised other variables, underscoring the need for balanced strategies. Effective resource minimisation reduced clothing volumes, while “Rethink” and “Reuse” strategies required less low-skilled labour compared to recycling, emphasizing targeted skill training's importance. However, focusing solely on job creation may backfire and may not lead to the best circular outcomes.