The effect of heterogeneous environmental regulations on the employment skill structure: The system-GMM approach and mediation model

Abstract

Environmental regulation has played an essential function in reducing pollution and it also influences the flow of labor. Although studies on employment and environmental regulation have gained prominence, most researches ignore the heterogeneity of regulatory tools and its discrepant impacts on different skilled labor; moreover, few literatures have explored how environmental regulations affect employment. Therefore, this study creatively incorporates environmental regulation, industrial green transformation and employment skill structure into a unified analytical framework, categorizing environmental regulations into command-and-control type, market-incentive type and voluntary type and analyzing the heterogeneous influences of environmental regulations on employment skill structure. Meanwhile, we explore the indirect impact of environmental regulations on the employment skill structure from the mediating role of industrial green transformation. The following are the research findings: (1) From a national perspective, both command-and-control and market-incentive types present a U-shaped association with employment skill structure, and their intensity has not surpassed the turning point yet; while the voluntary type is positively connected with the employment skill structure. (2) From the regional analysis, the findings in central and western areas are consistent with the national results; while the market-incentive and voluntary types show a reciprocal U-shaped connection with employment skill structure in eastern, and their regulatory intensity is in the rising stage of the curve. (3) Industrial green transformation acts as a partly mediator between market-incentive type and employment skill structure, but presents a suppression effect between command-and-control type, voluntary type, and employment skill structure. This paper takes industrial green transformation as the mediating variable, which emphasizes the importance of industrial green transformation and enhances the understanding on the mechanism of environmental regulation influencing employment skill structure. The research results provide theoretical support and significant reference for China in formulating policies to facilitate industrial green transformation, mitigate pollution, and optimize employment skill structure.