Green transition and job losses

Purpose This paper aims to highlight how green product trade has become a core growth driver of international trade, while the green transformation of enterprises driven by external green demand brings potential risks to the labor market. Design/methodology/approach Based on the construction idea of the Bartik instrumental variable, this paper uses the import data of green products at the HS 6-digit level from 207 countries and regions around the world from 2007 to 2016, matches the export information of Chinese enterprises, measures the changes in the demand share of green products in destination countries, and identifies the green transition induced by exogenous demand shocks. Findings The study finds that a one-unit increase in green transition leads to approximately 13.37% job losses, but it simultaneously optimizes the labor skill structure. The share of low-skilled labor decreases by about 4.58% points, while the share of high-skilled labor increases by roughly 0.97% points. This conclusion remains robust after a series of robustness tests. Mechanism tests indicate that enterprises achieve employment optimization through scale effects in energy input, green innovation effects, and product structure adjustment effects. The results of extended analysis indicate that employment in labor-intensive enterprises, enterprises with high artificial intelligence adoption, enterprises in highly competitive industries, and those with high market exposure is more significantly affected by the green transition. The findings of this paper provide managerial implications for firms' employment decisions in response to green transition. Originality/value The marginal contributions of this paper can be summarized as follows: First, due to the inconsistent definitions of green products and the lack of a unified method for measuring exports, this paper comprehensively collates green product list data with certain international consensus, providing new data references for research on green product exports. Second, this paper measures green transition through changes in exogenous demand share, avoiding the limitations of traditional models that rely on endogenous variables such as technological progress, thereby more directly identifying the causal effect of demand-side-driven green transition. Starting from the micro enterprise level, this paper uses the actual import data of HS6-digit green products from 207 export destinations of China during 2007–2016, matching the enterprise export product market structure information and enterprise export production information in the China Customs Database. Based on this, the paper constructs a Bartik instrumental variable to measure changes in green product demand shocks from export destination countries, and empirically studies the relationship between green transition and employment. Third, this paper broadens the perspective of existing research by examining the impact and mechanism of green transition from two aspects: total labor scale and labor skill structure, supplementing the research dimension of the impact of exports on employment.