This article investigates the impact of the low-carbon city pilot program on income distribution. The program is designed to reduce urban carbon emissions in China while also serving as a quasi-natural experiment to examine the income distribution effect of environmental regulatory policies. Using the firm-year level data during 2007-2020, we adopt the staggered difference-in-difference method to explore the impact of the program on labor income share. This study finds that the LCCP program significantly affects firms' labor income share. The proportion of highly educated employees and the level of financialization within the firm act as mediators that influence labor income share. This paper suggests that government should use reasonable environmental regulatory policy to facilitate labor income share to alleviate inequality, promote the scope of the program to more cities, and help firms to improve human capital level as well as serve more financial policies.
Keywords: Corporate financialization; High-skilled workers; Labor income share; Low-carbon city pilot program; Resource-based city; Staggered DID.
© 2023. The Author(s), under exclusive licence to Springer-Verlag GmbH Germany, part of Springer Nature.