Will Environmental Regulations Change the Labor Demand Structure?Theoretical Analysis and Empirical Testing Based on the"Atmosphere Ten Articles"
Governments and firms worldwide are actively formulating environmental regulations to address pressing issues such as pollution and resource depletion to maintain ecological balance and human health.However,these regulations not only impact the environment but also significantly affect the labor market.Implementing environmental regulations places substantial pressure and presents transformation challenges on traditional industries,characterized by high pollution and energy consumption,potentially leading to significant job losses.Moreover,these regulations can stimulate the development of eco-friendly industries to create new employment opportunities.Therefore,environmental regulations not only affect the total demand for labor but also profoundly reshape its structure.Does environmental regulation change the structure of inter-industry labor demand?A comprehensive answer to this question is crucial for a detailed evaluation of the effectiveness of these policies and achieving a balance between environmental protection and economic development.This study examines the"Atmosphere Ten Articles",which represents China's most stringent air regulation policy to date.Unlike existing studies that assume a homogeneous impact of environmental regulations on labor demand across all firms,this study distinguishes between regulated and non-regulated firms.Through theoretical analysis and empirical testing,it compares the dynamic effects of environmental regulations on the labor demand of these two types of firms,clarifying the mechanisms through which environmental regulations affect labor demand structure.The study finds that environmental regulations change the structure of labor demand and have dynamic characteristics.In the short term,labor demand decreases in regulated firms while slightly increasing in non-regulated firms.In the long term,labor demand rebounds in regulated firms,whereas labor demand in non-regulated firms continues to experience significant growth.Mechanistically,the short-term decline in labor demand at regulated firms primarily stems from reduced production scales and investments in upgraded equipment.In the long term,the installation of end-of-pipe pollution control equipment and the recovery of production scales drive the recovery of labor demand.Meanwhile,the growth in labor demand at non-regulated firms is primarily due to production scale expansion and the absorption of displaced labor from regulated firms.Additionally,considering the heterogeneity in employee skill levels,automation levels in production,and firm age,this study underscores significant differences in how environmental regulations dynamically impact labor demand across regulated and non-regulated firms.This study makes three contributions to the topic of environmental regulation and labor demand.First,it investigates whether environmental regulations reshape the structure of labor demand.Unlike existing research,which typically treats all firms homogeneously,focusing on total labor demand impacts,this study distinguishes between regulated and non-regulated firms.It analyzes how labor demand shifts between these two categories during the implementation of China's stringent"Atmosphere Ten Articles,"thereby broadening the scope of research on the economic effects of environmental regulations.Second,it examines the short-and long-term impacts of the"Atmosphere Ten Articles"on labor demand structure and its mechanisms.Evaluating policy effectiveness requires a comprehensive assessment of both short-and long-term impacts,whereas current research often focuses on average treatment effects.This study offers empirical insights into the annual fluctuations in firm labor demand triggered by the"Atmosphere Ten Articles,"elucidating the dynamic employment repercussions of environmental regulations and enhancing the analytical framework on labor market impacts.Finally,the study develops a theoretical framework to analyze the impact of environmental regulations on labor demand in both regulated and non-regulated firms,along with the mechanisms involved.Building on existing research,it categorizes the potential impact pathways that the"Atmosphere Ten Articles"can affect labor demand into"restoration"and"revitalization"types.The synergy between theoretical constructs and empirical findings strengthens the study's basis for exploring the intricate relationship between environmental regulations and employment.
Atmosphere Ten ArticlesEnvironmental RegulationsLabor Demand StructurePolicy Adjustments
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