The Impact of Environmental Regulation on Unemployment Insurance Expenditure Level

Based on the provincial panel data of 31 provincial-level administrative units in China from 2006 to 2020, this paper uses the double fixed model to investigate the impact of environmental regulation on the level of unemployment insurance. The benchmark regression results confirm that environmental regulation has an expanding effect on the level of unemployment insurance. The robustness test was carried out by selecting the lagging environmental regulation as a tool variable to deal with endogenous problem and replacing the measurement method of environmental regulation and unemployment insurance level. The empirical results were still robust. In addition, the analysis of regional heterogeneity shows that the western region is most affected. In view of this, it is recommended that the central government carry out special transfer payments in the western region, where environmental constraints are becoming increasingly tight. And the local governments should fully consider the level of regional endowments while carrying out environmental treatment.