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Do pollutant discharge fees affect labor demand? evidence from china’s industrial enterprises

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  • Jiaman Li
  • Xiucheng Dong
  • Kangyin Dong

Abstract

The tradeoff between employment and the environment has become an increasingly important topic. By employing two enterprise-level datasets and a city-level dataset in China for the period 1999–2012, this study investigates the influence of pollutant discharge fees on the labour demand in manufacturing enterprises. Besides, considering the significant differences among cities, industries, and individuals in China, we perform a series of heterogeneity analysis. The study also explores the mediation impact mechanism from the manufacturing cost perspective, i.e. labour cost effect, energy cost effect, and equipment cost effect. The estimated results show that: (1) The more stringent pollutant discharge fees can significantly reduce the labour demand of Chinese manufacturing enterprises; for each 1% increase in the price of pollutant discharge fees, labour demand decreases by approximately 0.264%; (2) labour demand for cities with a low proportion of secondary industries, industries with low pollution intensity, and domestic private-owned enterprises tend to be influenced more by pollutant discharge fees; and (3) the labour cost effect and energy cost effect are both significant mediators, while the equipment cost effect is not significant. The above findings can provide feasible policy implications for improving environmental protection taxes.

Suggested Citation

  • Jiaman Li & Xiucheng Dong & Kangyin Dong, 2022. "Do pollutant discharge fees affect labor demand? evidence from china’s industrial enterprises," Applied Economics, Taylor & Francis Journals, vol. 54(2), pages 170-188, January.
  • Handle: RePEc:taf:applec:v:54:y:2022:i:2:p:170-188
    DOI: 10.1080/00036846.2021.1963662
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    Cited by:

    1. Liu, Guixian & Sun, Wei & Kong, Zhaoyang & Dong, Xiucheng & Jiang, Qingzhe, 2023. "Did the pollution charge system promote or inhibit innovation? Evidence from Chinese micro-enterprises," Technological Forecasting and Social Change, Elsevier, vol. 187(C).
    2. Yang, Zhiqing & Liang, Jing, 2023. "The environmental and economic impacts of phasing out cross-subsidy in electricity prices: Evidence from China," Energy, Elsevier, vol. 284(C).
    3. Dong, Kangyin & Li, Jiaman & Zhang, Haoran, 2023. "LNG point supply of villages and towns in China: Challenges and countermeasures," Applied Energy, Elsevier, vol. 334(C).

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