Study On Effect Of Industrial Pollution Treatment Investment On Labor Productivity

Since the reform and opening policy, China has discharged a large number of excessive industrial pollutants exceeding the carrying capacity of environment, causing serious industrial pollution and environmental destruction and endangering sustainable development of our country’s economy. The consequences of industrial pollution are such serious that the investment of the environmental pollution treatment has become a necessity to make up for the negative externality of environment. Some scholars point that the future hope of Chinese economy lies on the rise of labor productivity. From an economic point of view, the investment of the environmental pollution treatment not only contributes to the improvement of regional environment, but also has profound influences on the total social labor productivity growth through all kinds of transmission mechanism.Based on knowledge of the relative research status of industrial pollution treatment investment and labor productivity and after analyzing the economic mechanism, respective characteristics and development trends, this article spreads out empirical analysis in terms of the current effects of industrial pollution treatment investment on labor productivity from four points of view (total industrial pollution treatment investment, different types of industrial pollution treatment investment, lag effect of industrial pollution treatment investment, regional disparity) by using the provincial panel data of 31 provinces from 2003 to 2013, generalized method of moments (GMM) and other methods. This article is aimed at the study of how industrial pollution treatment investment affects on current labor productivity and trying to find a new method and new idea to promote the labor productivity growth rate from environmental treatment and environmental regulation. And the relative study can provide theoretical and empirical evidence for the formulation of regional industrial pollution treatment and economic development policies. Main empirical evidence demonstrates that:Firstly, industrial pollution treatment investment has positive effects on the current labor productivity. One hundred million yuan more on industrial pollution treatment investment,0.185%～2.33% more on the growth rate of labor productivity. The increase of industrial pollution treatment investment contributes to the worker’s decision effect larger than production effect or a cooperative force between decision effect and production effect. These promote the positive effect and contribute the growth of the labor productivity.Secondly, different types of industrial pollution treatment investment have positive effect on current labor productivity and it’s quite significant. But they differ from the current effect on labor productivity. Among them, effects of industrial solid waste treatment investment and noise treatment investment investment are most notably. Effects of the other pollutants treatment investment come last.One hundred million yuan more on different types of industrial pollution treatment investment,0.185%～ 2.33% more on growth rate of labor productivity.Thirdly, total industrial pollution treatment investment in China has noble lag effects on labor productivity. Lagging one phase has noble positive effects. And the lag effects are stronger than current effects. But, the lag effects form different types of industrial pollution treatment investment on labor productivity is not obvious on the whole. This indicates that the promotion effects from different types of industrial pollution control investment on labor productivity cannot be accomplished on one stroke. Accumulative effects should be considered.Fourthly, industrial pollution treatment investment in east, middle and west districts of China have positive effects on the current labor productivity. And they are all significant. Though they differ from each other, but not very large. And the effects on the middle and west districts’ labor productivity are more significant.This indicates that regional disparity should be considered in industrial pollution treatment investment. We should suit the measures to local conditions, take into consideration both needs of the state and the interests of the collectives and make a distinction between the primary and lesser one, especially on industrial pollution treatment investment in east part of China.Fifthly, the five different types of industrial pollution treatment investment in east districts have different effects in significance. Effects of industrial solid waste treatment investment and noise treatment investment are most notably. Lag effects of industrial pollution treatment investment between east, middle and west districts of China are quite different. The lag effects are notable only in middle district, and are positive. The lag effects are not significant in west and east districts in China.The contributions of this article lie in three aspects:First, previous studies pay attention to the production function. This article pays attention to the environmental regulation, and seizes the view of industrial pollution treatment investment. Second, different from the previous studies that regarding the industrial pollution as the byproducts of economic developments, this article regards industrial pollution treatment investment as an important factor in labor productivity input and output equation. Third, based on strict empirical demonstration,the policy suggestions for promoting labor productivity are quite specific, practical and prospective.