The Costs of Blue Sky: The Distributional Effects of Environmental Regulation on Labor Demand in China

In response to tougher environmental rules, factories need to cut down on pollution and modify their optimal production decisions, which may have an impact on their labor demand. We look into how China's policy for controlling air pollution in major cities affects jobs. Key Messages 

• China's policy on air pollution control in major cities decreased manufacturing jobs by about 3%. 
• Regulation-driven technological progress has made workers more productive but has also led to fewer jobs. 
• Women, low-skilled workers, and employees in domestic manufacturing firms are more affected by environmental regulations in China.