Environmental Regulation, Labor Allocation and High-Quality Urban Development

By constructing a spatial general equilibrium model including pollution and cleaning sectors, the theoretical analysis shows that: within the city, the increase of environmental regulation intensity will reduce the employment share of pollution sectors. Considering the labor migration between cities, the improvement of environmental regulation intensity of labor allocation between city produces two kinds of effects, followed by “crowding out effect” from lower income and “attraction effect” from environmental improvement, the size of the two kinds of effect determines the impact of environmental regulation on urban attraction. At the same time, because of the differences in the preference of low-skilled labor for the environment, the improvement of environmental regulations will increase the proportion of high-skilled talents in cities, thus affecting the urban development. Then, this paper uses the micro data of 2005 and 2010 census to test the consistency between the model hypothesis. The empirical results show that: China’s environmental regulation policy plays a positive role in high-quality urban development. The improvement of the intensity of environmental regulation will improve the environmental quality of cities by reducing the employment share of pollution departments, thus attracting labor inflow, increasing the proportion of urban high-skilled talents, and promoting the accumulation of human capital and urban development.