Green transformation in China: Structures of endowment, investment, and employment

Hefeng Tong, Yan Wang () and Jiajun Xu

Structural Change and Economic Dynamics, 2020, vol. 54, issue C, 173-185

Abstract: This paper analyzes the linkage between structures of endowment, investment, and resultant changes in employment, pollutant emission, and human welfare. Contrary to conventional wisdom, China's endowment structure has shifted toward human capital implying that its latent comparative advantage lies in the human capital–intensive sectors. We employ a System Dynamic model with 10 subsectors, and simulate the impact of changes in investment on changes in pollutant emission, employment, and welfare. Results show that, first, shifting investment to human capital would significantly improve people's welfare by reduced pollution and extended life expectancy. In 2030, average life expectancy will be extended by 0.91 years. Second, human capital–intensive green sectors will expand rapidly, generating a large number of green jobs. A policy implication of this paper is that shifting investment toward human capital can expedite green transformation, improve the resilience of the labor force, and contribute to a rise in human welfare.

Keywords: Endowment; Investment; Human capital; Structural transformation; Green development (search for similar items in EconPapers)
JEL-codes: E24 O10 Q50 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:streco:v:54:y:2020:i:c:p:173-185

DOI: 10.1016/j.strueco.2020.04.005

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