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Green transformation in China: Structures of endowment, investment, and employment

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  • Tong, Hefeng
  • Wang, Yan
  • Xu, Jiajun

Abstract

This paper analyzes the linkage between structures of endowment, investment, and resultant changes in employment, pollutant emission, and human welfare. Contrary to conventional wisdom, China's endowment structure has shifted toward human capital implying that its latent comparative advantage lies in the human capital–intensive sectors. We employ a System Dynamic model with 10 subsectors, and simulate the impact of changes in investment on changes in pollutant emission, employment, and welfare. Results show that, first, shifting investment to human capital would significantly improve people's welfare by reduced pollution and extended life expectancy. In 2030, average life expectancy will be extended by 0.91 years. Second, human capital–intensive green sectors will expand rapidly, generating a large number of green jobs. A policy implication of this paper is that shifting investment toward human capital can expedite green transformation, improve the resilience of the labor force, and contribute to a rise in human welfare.

Suggested Citation

  • Tong, Hefeng & Wang, Yan & Xu, Jiajun, 2020. "Green transformation in China: Structures of endowment, investment, and employment," Structural Change and Economic Dynamics, Elsevier, vol. 54(C), pages 173-185.
    • Handle: RePEc:eee:streco:v:54:y:2020:i:c:p:173-185
    DOI: 10.1016/j.strueco.2020.04.005
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    References listed on IDEAS

    as
    1. Ju, Jiandong & Lin, Justin Yifu & Wang, Yong, 2015. "Endowment structures, industrial dynamics, and economic growth," Journal of Monetary Economics, Elsevier, vol. 76(C), pages 244-263.
    2. Nordhaus, William D & Yang, Zili, 1996. "A Regional Dynamic General-Equilibrium Model of Alternative Climate-Change Strategies," American Economic Review, American Economic Association, vol. 86(4), pages 741-765, September.
    3. Brock, William A. & Taylor, M. Scott, 2005. "Economic Growth and the Environment: A Review of Theory and Empirics," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 28, pages 1749-1821, Elsevier.
    4. Shmuel Nitzan & Ariel Rubinstein, 1981. "A further characterization of Borda ranking method," Public Choice, Springer, vol. 36(1), pages 153-158, January.
    5. repec:hal:spmain:info:hdl:2441/4vsqk7docb9nmophtp29pk68cr is not listed on IDEAS
    6. Lin,Justin Yifu & Wang,Yan, 2017. "Going Beyond Aid," Cambridge Books, Cambridge University Press, number 9781107153295.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Sujuan Wang & Xiaonan Lin & Honggen Xiao & Naipeng Bu & Yanan Li, 2022. "Empirical Study on Human Capital, Economic Growth and Sustainable Development: Taking Shandong Province as an Example," Sustainability, MDPI, vol. 14(12), pages 1-22, June.
    2. Wang, Mei & Xu, Mi & Ma, Shaojun, 2021. "The effect of the spatial heterogeneity of human capital structure on regional green total factor productivity," Structural Change and Economic Dynamics, Elsevier, vol. 59(C), pages 427-441.
    3. Zou, Jin & Yan, Jingzhou & Deng, Guoying, 2023. "ESG rating confusion and bond spreads," Economic Modelling, Elsevier, vol. 129(C).
    4. Norbu, Nyingtob Pema & Tateno, Yusuke & Bolesta, Andrzej, 2021. "Structural transformation and production linkages in Asia-Pacific least developed countries: An input-output analysis," Structural Change and Economic Dynamics, Elsevier, vol. 59(C), pages 510-524.

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    More about this item

    Keywords

    Endowment; Investment; Human capital; Structural transformation; Green development;
    All these keywords.

    JEL classification:

    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • Q50 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - General

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