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Carbon markets, industrial robots, and the labour skill premium

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  • Wang, Yijing
  • Xi, Kang

Abstract

In the context of the global transition to a low-carbon economy, a key issue in balancing environmental regulation with the allocation of labour skills is how carbon market policies reshape the structure of labour demand through technological pathways. This study employs data from listed Chinese manufacturing companies from 2011 to 2023 and utilises a multi-period difference-in-differences (DID) approach to examine the impact of carbon market pilot policies. The findings indicate that these policies significantly promote firms’ skill premiums. Further mechanism analysis reveals that carbon emissions trading policies, by exerting regulatory pressure, incentivise firms to adopt robotics to enhance productivity. Consequently, firms' demand for high-skilled labour increases significantly, while the demand for low-skilled labour decreases. This study offers novel empirical evidence on the interaction between carbon market policies and labour market dynamics, providing policy insights to support the government in effectively responding to changes in the employment structure and promoting adaptive adjustments in the labour market during the green transition process.

Suggested Citation

  • Wang, Yijing & Xi, Kang, 2026. "Carbon markets, industrial robots, and the labour skill premium," Economic Analysis and Policy, Elsevier, vol. 89(C), pages 986-1004.
    • Handle: RePEc:eee:ecanpo:v:89:y:2026:i:c:p:986-1004
    DOI: 10.1016/j.eap.2026.01.009
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