Energy Endowment And Employment Growth

Energy is essential for the evolution and development of human’s history. Inrecent years, rapid economic development and population size expansion make theenergy demand increasing, and energy consumption has steadily increased. As animportant material foundation of a country’s economic development, energyendowment is essential to economic growth. Energy reserve in China is abundant, butthe distribution is uneven, mostly concentrated in the Midwest. The efficientdevelopment and utilization of energy is a key element to accelerate nationalindustrialization and urbanization process. Fully giving the welfare effects of energyendowment and improving the efficiency of energy resources exploitation can avoidthe simple pursuit of short-term interests during the process of development andutilization, which is significant to promote sustainable economic growth, solve theemployment problem, reduce losses and improve the ecological environment.Employment is people’s livelihood, and is vital for the mass’s interests, for the overallsituation of reform, development and stability, for the realization of the grand goal ofbuilding a moderately prosperous society. Full employment is also one of the world’smacroeconomic objectives that expected to be achieved in each country, thus, solvingemployment problems is the problem that many countries must face in long-termdevelopment process.This article is inspired by the fact that China’s energy affluent areas haverelatively low employment growth. Based on the previous research of energyresources and economic growth, this paper explores whether abundant energy reservereally has negative impact on employment growth, which has strongly practicalsignificance for such a large population, labor resource-intensive developing country.Accordingly, this paper is divided into the following four parts subject discussed:Firstly, introduce the background and significance of the article, and sort therelated research literatures to find that the current study had less attention on therelationship between energy endowments and employment growth measured byemployment elasticity. So this paper describes the theoretical and empirical analysisof the impact on the transmission mechanism of energy endowment influenceemployment growth.Secondly, analysis the mechanism of energy endowment affects employment growth from the main three effects including path-dependent of economicdevelopment, de-industrialization of industrial structure and job destruction of biasedtechnical progress. Path-dependent effect means regions with abundant energy areover-dependant on energy to develop resource-intensive industries, which makeslocal economic development single, industrial structure curing, and economic growthlimited. It’s unable to absorb more labor force. Deindustrialization effect means thedevelopment of resource-intensive industries hindered the development ofmanufacturing industries and related services. It results that industries can’t play anactive role in promoting economy and employment growth. Biased technologicalprogress effect is illustrated that machines tend to replace labor in affluent energyareas. Destructive effect on employment of technical progress is evident, and it leadsemployment growth to sluggish.Thirdly，use time series data of energy endowment and employment growth tomake stationary, cointegration and Granger causality test. It finds energy endowmentand employment growth have cointegration relationship, and energy endowment isthe unidirectional causality of employment growth. Then, create panel data model ofenergy endowment and employment growth, considering economic growth,industrialization degree and technological progress, but also adding a number ofcontrol variables such as government intervention. The analysis is from the nationalperspective and regional level. Results show that energy abundance inhibits thedegree of the employment elasticity, and the effect occurs primarily through economicgrowth, the industrialization degree and technological progress. Governmentintervention and other control variables also have some impact on employmentflexibility. Finally, robust test indicates that the conclusions are reliable.Fourthly, according to the results, this paper proposes several policyrecommendations from the perspective of the industrial structure, human capital andtechnological progress.