The potential synergy between air pollution control and employment growth

Public service sectors play crucial roles in maintaining societal functioning through the provision of essential services. However, amidst the backdrop of air pollution, their developmental trajectories may veer off course from their intended goals. Quantifying the impact of air pollution on public service sectors, particularly from an employment perspective, offers valuable insights for policymakers aiming to foster the sustainable growth of these sectors and expand the analysis framework on air pollution externalities. Drawing on monthly data spanning from January 2015 to December 2019 across 269 prefecture cities, this paper therefore explores the impact of air pollution on public service sector employment using a cross-lagged panel model with fixed effects. I find that air pollution negatively affects the employment scales in public service sectors. This negative employment shock is also unevenly distributed across areas and sub-sectors and intensifies over time. Cities belong to key areas for air pollution prevention and control, small and medium-sized cities, and secondary-industry dominated cities, suffer disproportionately negative employment shocks in their public service sectors. These findings offer actionable insights for policymakers to implement targeted measures supporting the continued growth of public service sectors and deepen understanding of the economic ramifications of air pollution.