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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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    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. Zhang, Weijie & Li, Bowen, 2025. "Energy-use rights trading, technological innovation, and green transformation of energy-intensive manufacturing enterprises," Economic Analysis and Policy, Elsevier, vol. 86(C), pages 528-544.
    3. 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.
    4. Zou, Jin & Yan, Jingzhou & Deng, Guoying, 2023. "ESG rating confusion and bond spreads," Economic Modelling, Elsevier, vol. 129(C).
    5. Junqi Wen & Yong Lan & Guoqin Bu, 2024. "Do Innovation and Entrepreneurship Support Policies Promote Urban Green Transformation?—The Mediating Role of Fiscal Technology Expenditure," Sustainability, MDPI, vol. 16(7), pages 1-24, March.
    6. Yongjie Wu & Jingwen Wang & Mengxuan Jia, 2025. "Measurement, Regional Differences and Convergence Characteristics of Comprehensive Green Transformation of China’s Economy and Society," Sustainability, MDPI, vol. 17(9), pages 1-23, April.
    7. Ren, Xiaohang & Xiao, Ya & Xiao, Shitong & Jin, Yi & Taghizadeh-Hesary, Farhad, 2024. "The effect of climate vulnerability on global carbon emissions: Evidence from a spatial convergence perspective," Resources Policy, Elsevier, vol. 90(C).
    8. Mingyao Cao & Keyi Duan & Haslindar Ibrahim, 2025. "Corporate underinvestment and its effects on environmental, social, and governance performance," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 27(6), pages 13755-13775, June.
    9. 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.
    10. Geneviève Christel KAMDOUM MAPA & Younchawou NGOUWOUO & Emmanuel NSO FILS, 2025. "Insurance and sustainable structural transformation: Does renewable energy matter?," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania / Editura Economica, vol. 0(3(644), A), pages 239-256, Autumn.
    11. Zhengang Zhang & Peilun Li & Liangxiong Huang & Yichen Kang, 2024. "The impact of artificial intelligence on green transformation of manufacturing enterprises: evidence from China," Economic Change and Restructuring, Springer, vol. 57(4), pages 1-36, August.
    12. Razzaq, Asif & Sharif, Arshian & Yang, Xiaodong & Dogan, Eyup, 2024. "Influence mechanism of electricity price distortion on industrial green transformation: A spatial analysis of Chinese regions," Energy Economics, Elsevier, vol. 130(C).

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    Keywords

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    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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