Influence Mechanism Of Environmental Regulation On Manufacturing Employment

How to balance environmental protection and economic development has always been a key issue in policy formulation.Although environmental regulations can lead to improvements in environmental quality and associated declines in disease and mortality,direct and indirect abatement costs are associated with corporate pollution reduction.Among them,the impact on the employment of manufacturing enterprises is one of the most concerned influences of all sectors.This study aims to analyze the impact of China’s pollution control policies on labor demand.This study uses enterprise microdata to construct an econometric model,so it can provide scientific policy recommendations for the formulation of China’s environmental policy.Specifically,based on environmental microdata and industrial enterprise data,and the data of urban and individual levels,this study uses cutting-edge econometric methods including difference-in-differences method,triple differences method,instrumental variable method,and propensity score matching to explores the employment impact of corporate pollution control from multiple levels and multiple perspectives.This study uses firmlevel panel data to analyze the impact of pollution control on labor demand and the heterogeneous effects between industries and regions.Secondly,considering the transfer of labor and the entry and exit of enterprises,this study analyses of the generalized marginal impact of environmental regulation on labor demand.On this basis,this study further analyzes the impact of different pollution control strategies on labor demand.Finally,this study comprehensively analyzes the regional economic and social welfare impacts that environmental policies may generate,and focuses on the heterogeneous impact of environmental policies on different employment groups,thus providing a scientific basis for policy formulation.Specifically,this study answers the key questions about the impact of environmental policy employment in three aspects:First,whether environmental regulations have an impact on the employment of manufacturing enterprises and how much impact they have.In order to answer this question,we first need to find an appropriate measure of the intensity of environmental regulation.This study uses the instrumental variables of corporate environmental pollution reduction,water pollution emission standard policy,and air pollution control key city policy to construct measures of environmental regulation intensity.The study found that corporate air and water pollutant emission reduction significantly reduced the labor demand of enterprises.After the enactment of the environmental policy,the labor demand of the regulatory group was significantly lower than that of the control group.According to the impact of the policies obtained in this study on the company’s sulfur dioxide emissions and labor demand,every 1%reduction in sulfur dioxide emissions will result in a drop in labor demand by 0.16%.Based on this,the potential employment impact of China’s "13th Five-Year Plan"period is calculated.During the "13th Five-Year Plan",China plans to reduce 15%of sulfur dioxide emissions relative to 2015.According to the emission reduction-labor demand elasticity obtained in this study,the reduction of sulfur dioxide during this period will reduce the labor demand of polluting manufacturing enterprises by about 1.4%per year compared with 2015.Using 2015 as a benchmark,according to our calculations,about 70,000 manufacturing workers are unemployed every year,making the unemployment rate rise by 0.38%from 4.05%in 2015.Second,this study explores the mechanism of the impact of environmental regulation on the demand for labor in enterprises.Based on the environment-labor model developed by Berman,a theoretical model for the employment impact of corporate pollution control is constructed.In general,the direction of the impact of corporate pollution control on the labor demand of enterprises cannot be determined by theoretical models,which depends on the specific pollution reduction strategies of enterprises.Based on the theoretical model,this study uses enterprise-level environmental data to construct a measure of enterprise process control and end-of-pipe.Specifically,this study uses the amount and intensity of pollutants produced during the production process by enterprises as a measure of enterprise process control;uses the amount of pollutants removed,the capacity of pollution control facilities,the number of pollution control facilities,and the operating costs of pollution control facilities as a measure of enterprise end-of-pipe.The study found that only the labor demand of the process control group companies decreased significantly,while the labor demand of the end-of-pipe group enterprises was not significantly affected.In general,the above results indicate that companies that reduce pollutant emissions through process control to reduce pollutant emissions will reduce the labor demand of enterprises due to the substitution effect;while the increase in pollutant removal by enterprises through endof-pipe treatment has no significant impact on the labor demand of enterprises.The empirical results are consistent with the theoretical assumptions.Third,this study further analyzes the heterogeneity of the impact of environmental regulation on different types of labor.Considering that different groups are affected by environmental regulations differently,this study mainly analyzes the heterogeneous employment effects of different ownerships and different skill groups.The study found that environmental regulation has only a significant negative impact on the labor demand of private domestic enterprises,but not on state-owned enterprises and foreignfunded enterprises.After the key city policy,the labor demand of the private domestic enterprises fell by 6-7%.Therefore,compared with state-owned enterprises and foreign-funded enterprises,environmental regulation has a greater employment impact onprivate domestic enterprises’ manufacturing workers.According to the analysis of the theoretical model,the use of process control for pollution reduction will have a substitution effect on the labor force due to technological upgrading,especially for lowskilled labor.The study found that the key city policy significantly reduced the demand for low-skilled labor,but the impact on demand for highly skilled labor was not significant.In terms of the magnitude,the low-skilled labor force has decreased by 910%after the policy.The impact of policies on low-skilled labor is greater than the average treatment effect(4%).In view of the fact that enterprise-level data cannot directly observe the educational level of employees,this study further uses China’s Urban Household Survey data to analyze the impact of key urban policies on unemployment and unemployment of respondents with different levels of education.Prior to the policy,the likelihood of unemployment in thetreatment group and the control group was similar,but after the policy,the proportion of the treatment group’s unemployed increased.In this study,the sample was divided into high-skilled labor and low-skilled labor according to the degree of education.Only low-skilled labor was significantly affected by environmental regulation,while high-skilled labor was not significantly affected.The possibility of low-skilled labor unemployment has risen significantly after the policy,and the magnitude is higher than the average treatment effect.This shows that the low-skilled labor force is more affected than the highly skilled workforce under more stringent environmental regulation.In order to realize the blue sky plan,the Chinese government will continue to strengthen environmental governance and environmental regulations.As China’s environmental regulations become more stringent,analyzing the potential costs of environmental policies is critical,and the impact on manufacturing employment is one of the most important costs.According to the results of this study,corporate pollution re-duction is accompanied by a decline in labor demand,especially for low-skilled labor.Therefore,in the formulation of pollution reduction targets,the costs and benefits un-der different objectives should be considered,and reasonable emission reduction targets should be established in the context of fully assessing the potential total social benefits and total social costs.At the same time,it is necessary to take into account the issue of social equity,such as targeted support and relief for vulnerable groups(small and medium-sized private labor,low-skilled labor).