“Hidden price”: Energy conservation and emission reduction targets and employment growth

To achieve the “Carbon Peak” and “Carbon Neutrality” goals, the Chinese government is continuously strengthening energy conservation and emission reduction (ECER) work. However, this measure may also have an impact on employment in enterprises. To clarify its impact characteristics, we manually collect and organize prefecture-level municipal government work reports, and characterize ECER targets based on whether the government's planning terms involve ECER. This paper combines the China Industrial Enterprise Database and China Listed Company Database to empirically test the impact of ECER targets on employment growth in enterprises. We find that ECER targets inhibit employment growth in enterprises, and this effect is still significant after considering the endogeneity problems. The results of the mechanism analysis show that at the macro level, ECER targets can inhibit employment growth by exacerbating resource mismatch and weakening market competition. At the micro level, ECER targets can increase the enterprise's fixed assets investment and tax burden, and reduce the enterprise's wage, which has a negative impact on employment growth. In addition, we also find that the inhibitory effect of ECER targets on employment growth is more significant in foreign-capital enterprises, private enterprises, and enterprises in the eastern region.