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Environmental regulation and wages in China

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  • Vinod Mishra
  • Russell Smyth

Abstract

In this study we examine the extent to which firms pass back the cost of pollution regulation to workers, in the form of lower wages, using a unique matched employer-employee dataset for Shanghai. The benefits and costs of pollution regulation in China are important topics to study as China comes under increasing pressure to move from a single-minded focus on energy-driven economic growth to a more balanced approach to economic growth. The benefits of such a shift, particularly in terms of health, are relatively well studied, but the costs are less so. The hip-pocket effect of pollution regulation on workers' wages is particularly important, given that it is likely to influence public support for a more balanced approach. Our main finding is that the reduction in average wages attributable to firms taking measures to control for pollution is between 13.8% and 18.8%, all things being equal.

Suggested Citation

  • Vinod Mishra & Russell Smyth, 2011. "Environmental regulation and wages in China," Journal of Environmental Planning and Management, Taylor & Francis Journals, vol. 55(8), pages 1075-1093, August.
  • Handle: RePEc:taf:jenpmg:v:55:y:2011:i:8:p:1075-1093
    DOI: 10.1080/09640568.2011.636556
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    Cited by:

    1. Kim, Kijin, 2013. "The Effects of the Clean Air Act on Local Industrial Wages," 6th Annual CRAE, April 5-6, 2013, Columbus, Ohio 147489, Midwest Graduate Student Conference on Regional and Applied Economics (CRAE), The Ohio State University, Department of Agricultural, Environmental and Development Economics.

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