 Environmental regulation and intra-firm wage inequality: A skill premium perspectiveRuting Huang, Shanshan Duan and Xiyan Li Energy Economics, 2025, vol. 148, issue C Abstract: This paper investigates how firms respond to environmental regulations and their impact on the wage gap between skilled and unskilled labor. We employ a difference-in-difference-in-differences estimation strategy based on the dataset of prefecture-level SO2 emission reduction targets obtained by the Eleventh Five-Year Plan and firm-level datasets from 2002 to 2008. Results show that more polluted firms undergo a larger wage gap expansion between skilled and unskilled labor. This effect is pronounced among firms located in eastern or highly regulated regions, and those that are labor-intensive. Moreover, further analysis suggests that the gap results from relative wage adjustments rather than from extensive margin or relative migration patterns. Skill-biased technological change is pivotal in increasing the skill premium and bargaining power of skilled workers, driven by the technological biases embedded in environmental regulations. Overall, our findings shed light on environmental regulation policy to safeguard distributional equality. Keywords: Environmental regulation; Intra-firm wage inequality; Skill-biased technological change; Skill premia (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:148:y:2025:i:c:s0140988325005067 DOI: 10.1016/j.eneco.2025.108679 Access Statistics for this article Energy Economics is currently edited by R. S. J. Tol, Beng Ang, Lance Bachmeier, Perry Sadorsky, Ugur Soytas and J. P. Weyant More articles in Energy Economics from Elsevier |
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