This paper quantifies the effect of waste recycling on GDP in OECD countries from 2000 to 2012. We focus on national levels and use external instruments to control for the endogeneity between GDP and waste recycling. Specifically, we examine the influence of labour, material flow and research and development (R&D) as drivers of this relationship. While R&D is often seen as key factor for a sustainable development, labour and material trades are of a higher importance for sustaining growth through recycling. Empirical results show a positive and statistically significant effect of waste recycling on the economy. An increase of 1% of the recycled waste raises GDP by up to 0.06%. Waste management, if well planned, can be a catalyst for a stagnating economy. Furthermore, our results show that the benefits of waste recycling are given rise through labour and resource flow channels. Governments are encouraged to initiate recycling investment accordingly, as such initiatives will not only improve the environment but also generate positive social welfare and pushes the transition to a circular economy.