Would the inequality of environmental quality affect labor productivity and the income gap? Evidence from China

Healthy ecosystems and safe workplaces are not equally distributed across regions and people. Increasingly close economic exchanges domestically and abroad have aggravated regional environmental unequal status in China. To evaluate China’s inequality of environmental quality, four-panel environmental Gini coefficients are calculated for 25 Chinese provinces based on the data for 281 prefecture-level cities from 2008 to 2018. China’s inequality level of environmental quality is measured by resource inequality and pollution inequality. The results of the spatial Durbin model and GMM estimations indicate that resource inequality may widen the local income gap but narrow the income gap with distant regions, while the uneven environmental quality significantly inhibits the improvement of labor productivity. The dynamic threshold model results show that pollution inequality in areas with relatively low education levels will widen the local income gap, while resource inequality in areas with low health levels has a strong inhibiting effect on labor productivity.