The Spatial Effect of Air Pollution Governance on Labor Productivity: Evidence from 262 Chinese Cities

Abstract

According to epidemiological studies, air pollution can increase the rate of medical visits and morbidity. Empirical studies have also shown that air pollutants are toxic to animals. Using data from 262 Chinese cities for the period 2005 to 2018, this study systematically investigated the spatial spillover effect and transmission mechanism of air pollution governance on urban labor productivity. In this study, we also explored the changing trend of labor productivity in China from a dynamic perspective. Additionally, we selected the air flow coefficient and environmental regulations as two instrumental variables of air pollution governance to effectively alleviate endogenous problems existing in the model. The results show that air pollution governance plays a significant role in promoting the improvement of labor productivity. The effect of air pollution governance on labor productivity in eastern cities is better than that in central and western cities, and its effect in developed cities is better than that in undeveloped cities. With the increased intensity of air pollution governance, its effect on labor productivity is also strengthened. Urban innovation capacity and residents’ health are important channels for air pollution governance in the promotion of labor productivity. Finally, this study proposes policy recommendations, such as implementing a joint prevention and governance mechanism, as well as improving air pollution prevention and government regulations.