The Impact Of Environmental Regulation On Labor Participation Rate In China

Since the reform and opening up,China's economic development has made remarkable achievements.China's abundant labor resources have become the main driving force of socio-economic development,which is contrary to the fact that China's labor participation rate has declined year by year in recent years,and the effective labor population has also been shrinking year by year.At the same time,the contradiction between environmental pollution and economic growth is increasingly prominent,and environmental pressure is gradually increasing.Environmental problems not only carry the lives of our residents,the economic welfare of our society,but also the labor force participation in China.The environmental Kuznets inverted U hypothesis explicitly states that when economic development to a certain extent,the level of environmental pollution will gradually decrease with the level of economic development increases.However,as a developing country,the level of economic development has not reached the turning point,so as to raise the level of economic development of our country environment pollutant emissions are still rising stage,the effective environmental regulatory policies have become an important means to improve the current environmental pollution problems,resolve the contradictions between economic development and environmental problems.Existing studies have discussed the relationship between environmental pollution and labor supply,and few studies have incorporated environmental regulation into models to explore the impact of environmental regulation on labor participation rates.Therefore,this article considers environmental regulation to measure China's labor participation rate,and explore the impact of environmental regulations on labor participation rate.First of all,unlike previous scholars of labor participation rate measurement method,this article combines theoretical analysis of environmental Kuznets hypothesis theory,labor supply theory,and human capital theory to analyze the relationship between environmental regulation and labor participation rate.In order to obtain the labor participation rate of China,this article decomposes labor participation rate into employment rate and potential employment rate,and incorporates environmental regulations into the determination model of labor participation rate.From the perspective of labor demand,a stochastic frontier determination model of employment rate is established.The inefficiency term obtained from the measurement model calculates the potential employment rate,and then uses the employment rate and the potential employment rate to comprehensively measure China's labor participation rate.In order to reduce the estimation bias in stochastic frontier analysis,this paper adds Mundlak‘s auxiliary equation to the model.Second,in order to explore the relationship between environmental regulation and labor participation rate,this article introduces environmental regulation into the inefficiency term to measure potential employment rate,and comprehensively analyzes the impact of environmental regulation on labor participation rate from the impact on employment rate and potential employment rate.Furthermore,this paper investigates the effect of environmental regulations on labor participation rate in China from three perspectives: the impact of environmental pollution on the health of residents,the economic welfare characteristics of environmental pollution,and environmental pollution and labor market supply.The impact of environmental pollution on China's labor participation rate is indirect,mainly by affecting the physical health of the workers and then the working hours of the workers,by influencing the income of the labors and the fairness of income distribution to influence the enthusiasm of workers in our country,even affects China's employment level through the damage caused by environmental pollution to our economic welfare.Finally,the impact of environmental regulations on labor participation rates is manifold,and it will change continuously due to changes of economic development level,the intensity of environmental regulations and other factors.Based on the above theoretical model,the article uses the factual data set of China's provincial units over the period of 2006-2017,results suggest that:(1)Environmental regulation plays a significant positive role in promoting labor participation rate,and an increase of 1 percentage point in environmental regulation intensity will promote the average labor participation rate by 0.112 percentage points;(2)Environmental regulation not just has a significant positive effect on the employment rate,but can increase the potential employment rate in economic activities,this means the improvement of environmental quality brought by environmental regulation can promote the entry of more economically active people into the labor Market;(3)From the average level of provincial units,the impact of environmental regulation on potential employment accounts for 38.7%-73.8% of the contribution to labor participation rate,this show that the impact of environmental regulation on potential employment rate is vital.(4)From the perspective of the impact of environmental regulation on provincial units in 2017,the potential employment rate in the provinces where environmental regulation has a greater impact on labor participation rate is higher than the employment rate,which means that in the provinces that are more sensitive to environmental regulation policies,the potential employment rate is more sensitive to the environmental regulation than the employment rate.This text uses the factual panel data of China's provincial units to inspect the influence of environmental regulation on employment rate and potential employment rate simultaneously,and helps to supplement the ?double dividend effect? of environmental regulation,which helps to alleviate China's current problem of the disappearance of ?quantitative demographic dividends? from environmental regulation perspective,and provides a policy reference for the coordinated development of environmental policies and labor policies.