Research On The Influence Of Environmental Regulation On The Change Of Labor Income Share

With the diminishing marginal effects of investment,trade friction,environmental pollution,and other issues increasingly appearing in China,it is difficult to sustain the "investment driven" and "export oriented" growth models.Increasing the share of labor income and promoting consumption expansion and upgrading are the necessary ways to achieve economic transformation and upgrading.In recent years,in order to address issues such as resource scarcity and environmental damage,the country has successively introduced laws and regulations related to environmental governance,which has had a significant impact on economic,political,and ecological development.This article brings labor income share and environmental regulation into the same thinking framework,aiming to answer: How has China’s continuously strengthened environmental regulation affected labor income share? How to achieve a "win-win" situation between environmental protection and labor income share?This article establishes the impact path of environmental regulation on labor income share through combing existing research and relevant theories,and further combines empirical testing to provide more scientific suggestions for China’s policy formulation.This research sorts out the relationship between the two from the time dimension: In the short term,the production factors of enterprises cannot be fully adjusted,and the four behavioral decisions of enterprises under environmental regulations directly affect the share of labor income;In the long run,combining Marx’s distribution theory,Porter’s hypothesis,and the pollution paradise theory,environmental regulation has changed the allocation structure of factors,which will affect industrial structure,technological innovation,and foreign direct investment,further affecting the share of labor income.The empirical study uses China’s provincial panel data from 2004 to 2019,and uses a fixed effect model to test the mechanism.The results show that:(1)With the continuous improvement of China’s environmental regulation intensity,the share of labor income presents a "U" shaped trend of first decreasing and then increasing.Currently,China’s environmental regulation intensity is on the left side of the "U" curve,which will inhibit the increase in the share of labor income.In this process,due to the continuous deepening of the capitalization process,technological innovation has hindered the share of labor income;The industrial structure factors represented by the secondary industry have shown negative effects,and the adjustment of the industrial structure has played a promoting role in the share of labor income;Foreign direct investment has brought about employment effects and wage competition effects,and has also shown a significant promoting effect on the share of labor income.(2)In the long term,environmental regulation has further increased the share of labor income through industrial restructuring,technological innovation,and foreign direct investment.(3)The results of regional regression show that,among the direct effects,the impact of environmental regulations on labor income share in the eastern and central and western regions presents a significant "U" shaped trend;Foreign direct investment has played a different role in the two regions,mainly due to the differences in the degree of marketization between the two regions.In the indirect effect,environmental regulations in both regions promote the share of labor income through industrial structure adjustment;Environmental regulations in the eastern region inhibit the share of labor income through technological innovation,while in the western region,the opposite is true due to differences in the degree of capital deepening;Environmental regulation in the eastern region inhibits the share of labor income through FDI,while in the western region,the opposite is mainly due to the different intensity of environmental regulation.(4)In order to further promote the high-quality development of China’s economy,based on the previous analysis,this article proposes four policy recommendations: increasing environmental regulation,promoting industrial upgrading,accelerating the accumulation of human capital,and promoting market-oriented reform.