The Impact of Emissions Trading Program on the Labor Demand of Enterprises: Evidence From China

Frontiers in Environmental Science

Chang’an Wang¹  Xiaoqian Liu¹  Qian Xi²  Ying Zhang³ 

[1] Research Institute of Economics and Management, Southwestern University of Finance and Economics, Chengdu, China;School of Business, Beijing Institute of Fashion and Technology, Beijing, China;School of Business, Stevens Institute of Technology, Hoboken, NJ, United States;

关键词: emissions trading program;    environmental pollution;    labor demand;    policy effects;    environmental expenditure;   

DOI  :  10.3389/fenvs.2022.872248

来源: DOAJ

【 摘 要 】

The emissions trading program (ETP) is an effective means to fight environmental pollution. However, it may also spur the increase of enterprise costs, which affects employment and economic development. Adopting a difference-in-differences method and exploiting China’s emissions trading policy in 2007 as a quasi-natural experiment, we investigate the impact of the ETP on firms’ labor demand and the mechanism facilitating this effect. The results show that the ETP significantly reduces firms’ labor demand. The conclusion remains robust after using an instrumental variable to alleviate the possible endogeneity problem. Mechanism analysis indicates that the ETP reduces firms’ labor demand via increasing firms’ environmental expenditure and reducing profits. The heterogeneity analysis shows that the ETP significantly reduces the labor demand of SO2 emitting firms and heavy polluting firms, while having no significant impact on the labor demand of non-SO2 emitting firms and non-heavy polluting firms. This negative impact is more prominent for resource-based cities and old industrial base cities. This paper provides empirical evidence and policy implications for implementing the ETP in developing countries.

【 授权许可】

Unknown