The Effect of Environmental Performance on Employment: Evidence from China’s Manufacturing Industries

Abstract

This research aims to explore the interaction between environmental performance and employment China’s manufacturing industries. Based on the environmental performance of 32 industries in China’s manufacturing industry during 2006–2015, a panel vector autoregressive model was constructed to study the interaction between industry output and employment in clean industries and dirty industries. The dynamic impact and internal transmission mechanism between environmental performance is analyzed. The study found that in the early stage, due to the reduction of production scale, there was a weak and short-term negative correlation effect on employment, and the mutual promotion relationship between economic benefits and employment was unsustainable. In return, employment affects environmental performance, but the effect differs due to the different forms of environmental performance. For dirty industries, the impact of environmental performance on employment through technical effects is more significant and, thus, a win–win situation of ecological environment and employment stability will be achieved. This research has practical significance regarding how to scientifically and effectively carry out environmental regulation and green management.