How could we benefit from a low-carbon economy? Evidence from Chinese regional labor markets

Abstract

Existing studies on the employment effects of a low-carbon economy predominantly focus on sectoral dynamics instead of regions, providing limited references for prefectural policymaking. We address this gap by employing a fixed effects model and a dataset of Chinese cities from 2006 to 2020. Our findings highlight the significant contribution of a low-carbon economy to regional employment through the industry agglomeration effect and innovation effect. Heterogeneities are evident in the employment-promoting influence of a low-carbon economy, as cities with lenient environment enforcement, ample education investment, and non-resource-dependent structures benefit more significantly. Notably, a low-carbon economy exhibits a disproportionately higher employment promotion effect in cities with mid-range employment populations. In addition, we identify co-benefits of a low-carbon economy, including higher average salaries and mitigation of aging trends. These insights foster a better understanding of the low-carbon economy and offer valuable guidance for prefectural governments seeking to develop targeted low-carbon economy strategies.