报告题目：To wheel to deal: The unintended societal outcomes of labour cost shocks
报告摘要：Firms respond to labour cost shocks through capital investment, employee layoffs, and pricing strategy. In this study, we find a speculative cost-shifting strategy through increased environmental pollution that firms have employed to deal with rising labour costs. Using the geographical discontinuity of China’s Minimum Wage Policy at county boundaries for identification, we find a 10% increase in the minimum wage leads to an average of 3.48-3.58% increase in affected firms’ SO2 emissions. Considering that the average annual growth rate in China is 12.23%, the societal impact of the Minimum Wage Policy cannot be ignored. To mitigate potential endogeneity concerns, we design quasi-natural experiments such as administrative boundary adjustments and downward changes in the minimum wage. The results remain robust to these endogeneity analyses and a battery of robustness checks. Further analysis shows that the increased pollutions in response to labour cost shocks are mainly through prolonging production hours, increasing employee competition, and crowding out green investments. Our results also suggest that stringent environmental regulation, raised public environmental awareness, stable economic policy environment, enhanced labour protection, reduced financial pressure, and increased trade credit are possible moderation strategies to alleviate the conflict between low-income labour protection and undesired environmental pressure. Last but important, although firms can respond to labour cost shocks by increasing pollution levels in the short term, this is detrimental to their long-term competitiveness and sustainable development.