•The decoupling trend between welfare and wealth is statistically verified for China.
•Legislation improvement can notably alleviate the decoupling trend.
•The effects vary across legislation characteristics and socioeconomic circumstances.
•Environmental legislations have greater effects than non-environmental ones.
•Legislations have diminishing marginal benefits, so they should prioritize emerging sectors.
With an increasing decoupling trend between welfare and wealth, alleviating the decoupling trend has become a key issue on the agenda of sustainable development. This paper verifies the existence of the decoupling and examines the effects of legislation on the trend. By conducting an analysis on China's 31 provinces from 1986 to 2018, we find that legislation improvement can notably alleviate the decoupling trend. The effects vary across legislation characteristics as well as across socioeconomic circumstances. First, legislations of high legal validity have long-term alleviation effects, and legislations of lower validity have immediate benefits. Second, legislations issued by higher authorities take effect in a larger jurisdiction scope, while those by lower authorities can tailor the legislations to satisfy local needs. Third, the effects of environmental legislations on remedying the decoupling trend are significantly greater than those of non-environmental legislations. Fourth, as an economy develops and the role of law steps up, the marginal effects of legislation on alleviating the decoupling show a generally diminishing trend, so the legislations should give priority to emerging sectors. This study offers the first quantitative evidence of the effects of legislation on human welfare. We offer suggestions on legislation system to improve human welfare.
