Creation or disruption? Unraveling the employment effects of public environmental concerns in China

Purpose This study investigates the impact of public environmental concerns (PECs) on employment in China. Additionally, it explores the potential mechanisms and implications of PECs on employment. Design/methodology/approach This study adopted the fixed effects model to analyze the impact of PECs on overall employment and employment across skill levels for China’s A-share listed companies from 2011 to 2021. Using the mediating effect model, this study examines the mechanisms through which PECs influence employment across diverse skill levels. Findings The results show that PECs did not affect overall employment but affected employment by skill level. PECs promoted high-end and medium-end high-skilled employment while reducing low-skilled employment, refining the employment skill structure. PECs promoted overall employment through improved ESG performance and green innovation, optimizing the employment skill structure via green innovation compensation and productivity effect. PECs demonstrated a more pronounced effect on labor-intensive firms, non-heavily polluting companies, and non-state-owned enterprises (non-SOEs). The polarization effect of PECs on employment exacerbated the income gap within firms. Practical implications This study provided policy implications for mitigating adverse effects on medium- and low-skilled employment and facilitating skill acquisition and career development in response to increased PECs. Originality/value Extant literature on PECs has focused on environmental benefits, often neglecting their impact on labor markets. This study offers a crucial understanding of how PECs influence the labor market in emerging economies.