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Job destruction and creation: Labor reallocation entailed by the clean air action in China

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  • Li, Zhenran
  • Wang, Meng
  • Wang, Qunwei

Abstract

Understanding the mechanism of labor reallocation during the implementation of environmental regulations is important for countries to stabilize employment. Using city-level data and listed firm-level data from 2005 to 2019, we investigated the labor reallocation entailed by the Clean Air Action (CAA) from 2013 to 2017 in China, and found that the CAA substantially reduced labor demand in regulated cities and listed firms. Notably, the CAA has entailed different levels of job destruction and job creation across time, industries, and firm types, boosting labor reallocation. Firstly, the effect of the CAA on labor demand was time-varying, as labor demand first decreased and then recovered from 2013 to 2019. Secondly, the CAA generated a greater job destruction in polluting industries and their downstream industries, and job creation in clean industries. Lastly, thanks to the CAA firms have increased the hiring of highly skilled workers, although equipment upgrades have reduced labor demand, especially in polluting firms.

Suggested Citation

  • Li, Zhenran & Wang, Meng & Wang, Qunwei, 2023. "Job destruction and creation: Labor reallocation entailed by the clean air action in China," China Economic Review, Elsevier, vol. 79(C).
    • Handle: RePEc:eee:chieco:v:79:y:2023:i:c:s1043951x23000305
    DOI: 10.1016/j.chieco.2023.101945
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    Citations

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    Cited by:

    1. Dan Xie, 2024. "China’s Manufacturing Pollution, Environmental Regulation and Trade," FIW Working Paper series 198, FIW.
    2. Jiamin Liu & Xiaoyu Ma & Bin Zhao & Qi Cui & Sisi Zhang & Jiaoning Zhang, 2023. "Mandatory Environmental Regulation, Enterprise Labor Demand and Green Innovation Transformation: A Quasi-Experiment from China’s New Environmental Protection Law," Sustainability, MDPI, vol. 15(14), pages 1-31, July.
    3. Wei, Xiahai & Jiang, Feng & Su, Yaqin, 2024. "More green, less labor gains? Green factory and labor income share in China," Energy Economics, Elsevier, vol. 133(C).
    4. Lai, Aolin & Li, Zhenran & Hu, Xiurong & Wang, Qunwei, 2024. "Does digital economy improve city-level eco-efficiency in China?," Economic Analysis and Policy, Elsevier, vol. 81(C), pages 1198-1213.
    5. Xiaoyun Wei & Chuanmin Zhao, 2024. "Does Chinese Environmental Policy Affect Income Inequality? Evidence from the Central Environmental Protection Inspection," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 32(3), pages 130-161, May.
    6. Zhu, Qingyuan & Xu, Chengzhen & Chen, Qingjuan & Wu, Liangpeng, 2024. "Oil price distortion and its impact on green economic efficiency in China’s transportation: A spatial effect perspective," Renewable and Sustainable Energy Reviews, Elsevier, vol. 191(C).

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