Does the environmental protection tax improve population health? Evidence from China's quasi-natural experiment.

Health constitutes a fundamental component of human capital for high-quality economic development and an important indicator of social well-being. Using panel data for 31 Chinese provinces from 2010 to 2023, this study treats the implementation of the Environmental Protection Tax Law of the People's Republic of China in 2018 as a quasi-natural experiment and employs a difference-in-differences model to systematically identify the effect of the environmental protection tax policy on population health. The results show that, first, the environmental protection tax policy significantly improves population health, and this finding remains robust after controlling for province fixed effects, year fixed effects, and a set of relevant covariates. Second, the baseline results are consistently supported by the parallel-trends test, placebo test, control for concurrent policies, replacement of the dependent variable, and propensity score matching difference-in-differences estimation. Third, the mechanism analysis indicates that pollution reduction and investment in environmental pollution control are important channels through which the environmental protection tax improves population health. Fourth, the regional heterogeneity analysis shows that the policy significantly improves population health in eastern and western China, whereas its effect in central China is positive but statistically insignificant, suggesting a certain degree of regional variation in policy effectiveness. This study extends the literature on the effects of environmental protection taxation from the perspective of population health and provides empirical evidence for improving the green taxation system and promoting coordination between ecological governance and the Healthy China initiative.