Can employment structure promote environment-biased technical progress?

- The factors influencing technical progress bias are scarcely studied.
- The OLG model is used to realize the endogenesis of biased technical progress.
- Any increase in the aging population encourages pollution-biased technology.
- Increasing aging population and SOEs prompt environment-biased technical progress.

Environment-biased technical progress can stimulate improvement in environmental quality, leading to coordinated development between the economy and the environment. However, the existing literature scarcely refers to the factors influencing the technical progress bias. We use the overlapping generations model to realize the endogenesis of biased technical progress in the Chinese context. We show that an increase in the aging population will encourage the use of pollution-biased technology and focus the attention of enterprises on improving economic benefits rather than environmental quality. We measure the directions of technical progress during 2003 to 2013 and estimate regressions for the relevant indicators of the labor force employment structure. Under equilibrium, increased ratios of the aging population and state-owned enterprises will stimulate environment-biased technical progress. Further, the effects of research and development and clustering of state-owned enterprises on environmental technology improvement are significant.