How economic transformation influence the employment of resource-based cities: Evidence from Shanxi Province, China

Abstract

Shanxi Province is one of the regions with the highest concentration of resource-based cities in China. For a long time, its economic development relied on coal mining. To implement the low-carbon development strategy, the National Development and Reform Commission (NDRC) established Shanxi Province as a Comprehensive Supporting Reform Pilot Zone for Resource-based Economy (CSRPZRE). This study aimed to make cost-benefit analyses of the CSRPZRE policy. We collected data of 284 Chinese cities from 2003 to 2017. DID models were utilized to estimate treatment effects of the CSRPZRE policy on CO2 emissions and employment. We further investigated mechanisms and heterogeneity of the CSRPZRE policy's impacts on employment. The study found that: (1) Due to the policy shock, both CO2 emissions and employment in Shanxi Province decreased by about 10%. (2) Industrial structure adjustment and foreign direct investment (FDI) utilization partially transmitted impacts of the CSRPZRE policy on employment. (3) Local governments' fiscal independence moderated treatment effects of the CSRPZRE policy on employment. (4) We confirmed that CSRPZRE policy reallocated workers from secondary and tertiary sectors to primary sectors. Finally, this paper summarized 3 experiences learned from the CSRPZRE policy pilot.