The interplay between environmental degradation and real GDP per capita has been the subject of extensive investigation in recent empirical research. Specifically, notable economic growth has been documented in developing nations over the past several decades. Nevertheless, this economic advancement has precipitated environmental degradation, primarily attributed to the substantial levels of carbon dioxide (CO₂) emissions. This phenomenon exacerbates the greenhouse effect and arises from quotidian activities associated with fossil fuel-dependent energy sources and deforestation practices. According to the World Population Reviews (2025), the leading three emitters of CO₂ globally in 2025 are identified as China, the United States and India. India, as examined in this research, represented a global share of 7.57% in carbon dioxide (CO₂) emissions in 2023. Collectively, these three nations have contributed over 53% of global CO₂ emissions (WPR, 2025). India is experiencing a rapid increase in energy consumption, driven by essential GDP growth for a developing economy and increased demands for cooling during heatwaves. In light of notable progress in the deployment of renewable energy sources and a continuous decline in associated costs, the demand for fossil fuels in India remains unchanged. In the first half of 2024, coal production and imports reached an unprecedented high to meet the heightened seasonal demand for electricity. At present, non-fossil energy sources represent 46% of India’s total installed capacity, suggesting that the nation is progressing effectively towards its conditional NDC target of reaching 50% non-fossil capacity ahead of the anticipated timeline. Nonetheless, The Climate Action Tracker (CAT) evaluates India’s climate targets and policies as “Highly Insufficient,” suggesting that India’s climate strategies and commitments are not consistent with the Paris Agreement’s 1.5°C temperature threshold (CAT, 2025).
       
Developing nations exhibit a significant reliance on fossil fuel resources, specifically oil, coal and natural gas. The empirical literature regarding the robustness of the environmental Kuznets curve (EKC) hypothesis, particularly in relation to electricity consumption, remains limited within the specified demographic. For example, Al Sayed and Sek (2013) conducted an inquiry into the EKC hypothesis across both developed and developing economies. Their findings indicated that developed nations possess elevated turning points when juxtaposed with their developing counterparts. Environmental degradation has emerged as a pressing issue and a significant concern that impacts the attainment of Sustainable Development Goals (SDGs), primarily attributable to the rapid escalation of CO₂ emissions and global warming (Ahmed et al., 2020; Ibrahim and Law, 2016). The origins of pollutant emissions in developing nations remain ambiguous and contentious (Ha and Nguyen, 2021). A multitude of studies has demonstrated that nations with a strong institutional framework are more likely to undertake initiatives aimed at reducing CO₂ emissions, lessening greenhouse gases, addressing climate change and improving environmental quality. A significant number of empirical analyses have confirmed that nations with well-established institutional structures are more inclined to undertake efforts focused on reducing CO₂ emissions, greenhouse gas expansion, the consequences of climate change and the enhancement of environmental quality (Ahmed et al., 2020; Dées, 2020; Ibrahim and Law, 2016; Khan and Rana, 2021; Ntow-Gyamfi et al., 2020). The caliber of institutions can play a pivotal role in promoting sustainable development (Hunjra et al., 2020), as the enhancement of institutional efficacy constitutes a fundamental mechanism for regulating and diminishing pollutant emissions within the context of economic advancement (Lau et al., 2014). An alternative investigation posited that the quality of institutions exerts a beneficial influence on the growth of per capita CO₂ emissions (Runar et al., 2017) and adversely affects environmental quality (Islam et al., 2021). Institutional performance is critically important in establishing a connection between foreign direct investment (FDI) and environmental pollutants; additionally, climate change negatively affects productivity growth, yet robust institutions can alleviate the adverse effects of climate change by facilitating the technology adoption process in developing nations (Ha and Nguyen, 2021; Kumar and Managi, 2016). In this context, it is essential to enhance institutional frameworks to implement more effective and efficient practices, wherein a well-functioning institution can be realized through the enforcement of suitable regulations, legal frameworks, property rights and corruption mitigation measures that collectively contribute to the reduction of pollutant emissions (Ali et al., 2019). Therefore, the intricate relationship between institutional quality and carbon dioxide emissions continues to pose a significant challenge within academic discourse as a means to fulfill the United Nations’ SDGs (Haldar and Sethi, 2021). Verick, (2014) defined Labour Force Participation Rate (LFPR) as a measure of the proportion of a country’s working-age population that engages actively in the labor market, either by working or by looking for work. LFPR is key component in economic development, contributing significantly to rise in country’s GDP (Costagliola, 2021; Venu et al., 2018). In addition to this LFPR remains the most key factor of production in the agriculture as well as in manufacturing which has most influential role in contributing to efficiency in productivity of a nation (Vishal and Sikander, 2020). As global greenhouse gas emissions have continued to rise, environmental quality has continued to deteriorate over time. In terms of labor market dynamics, these increased emissions lead to climate change and other socio-economic issues (Achuo et al., 2023). Designing strategies to ensure social equity through the creation of decent jobs and to improve environmental quality has been a growing priority for development organization and governments (Achuo et al., 2022). Environmental degradation is a global concern because it affects other regions of the world rather than the nation causing it. In view of growing world population, it becomes most essential priority for nations to create job opportunities for newly formed workforce. Economic growth generates new job opportunities and employment dives economic expansion (Koyuncu et al., 2024). Economic growth and environmental degradation are positively correlated  according to empirical research (Alola, 2019; Nasrullah et al., 2023; Rahman and Kashem, 2017). In examining the connections between environmental pollution and employment, prior research has established that the generation of foreign employment contributes to an escalation in environmental degradation, even in nations experiencing a decline in domestic job opportunities (Zhong and Su, 2021). The implementation of environmental regulations is increasingly recognized as a vital strategy for mitigating carbon dioxide emissions, influencing both direct and indirect employment levels by fostering technological advancements and reshaping industrial frameworks (Cao et al., 2017). Generally, a decrease in carbon dioxide emissions is associated with substantial job losses; however, it simultaneously encourages the growth of labor-intensive industries. Specifically, the service sector has the potential to realize a mutually beneficial scenario for economic advancement, the alleviation of environmental harm and the preservation of stable employment (Bai et al., 2021), whereas prolonged working hours in households contribute to carbon dioxide emissions and diminish environmental quality in the United States (Fremstad et al., 2019). Based on the future implications of the study of  Achuo et al., (2023), this study tries find out nexus of LFPR and environmental degradation for India. Quality green employment is crucial for resource productivity and sustainable development (International Labor Organization, 2018) as it tackles the global issues of economic advancement, environmental conservation and social inclusion. These positions offer employment possibilities, enhance resource efficiency and foster low-carbon, sustainable civilizations.

The data for this study is collected for India between 2000 and 2022 from the World Bank database and all the work related to this study has been caried out in the Department of Economics, Mizoram University during August to November 2025. The choice of country and period is conditioned by the availability of data for modelled variables of interest. Considering the detrimental impact of environmental pollutants from diverse sources, including greenhouse gases, suspended particulate matter (SPM) and various organic and inorganic chemicals, carbon emissions have persistently constituted a primary contributor to atmospheric environmental degradation (Alola, 2019). The present study utilized carbon dioxide (CO₂) proxied by the logarithm Carbon emissions, as the dependent variable for environmental degradation. The independent variable of interest used here is the labor force participation (% population). Robustness is further carried out with male labor force participation (% male population) and female labor force participation (% female population).  The other control variables utilized include trade as % of GDP, Foreign Direct Investment (FDI) as % of GDP.
 
Model specifications
 
This section outlines the theoretical and empirical models used to examine the relationship between LFPR and environmental degradation as proxied by carbon emissions. The models are specified in log-linear and first-differenced forms to address non-stationarity in time series data.
 
General theoretical model
 

Δ log (Emission_t) = α + β₁ Δ log (LFP_t) + β₂ Δ log (Trade_t) + β₃ Δ log (FDI_t) + ε_t

 
Where,
Log (Emission_t): Natural log of CO₂ emissions.
Log (LFP_t): Log of total labor force participation rate.
Log (Trade_t): Log of trade as % of GDP.
Log (FDI_t): Log of foreign direct investment as % of GDP. ε_t: Error term.
 
First-differenced empirical models
 
To ensure stationarity, variables are differenced using the formula:
 

Δ x_t ≡ x_t - x_{t - 1} and x_t ∈ {Emission, LFP, Trade, FDI}

 
This captures the short-run effects of changes in labor force participation on emissions.
 
Model A: Total LFP
 

           Δ log (Emission_t) = α + β₁ Δ log (LFP_t) + β₂ Δ log (Trade_t) + β₃ Δ log (FDI_t) + ε_t            ...(1)

 
Where,
Log (Emission_t): Natural log of CO₂ emissions.
Log (LFP_t): Log of total labor force participation rate.
Log (Trade_t): Log of trade as % of GDP.
Log(FDI_t): Log of foreign direct investment as % of GDP. ε_t: Error term.
 
Model B: Male LFP
 

                  Δ log (Emission_t) = α + β₁ Δ log (LFP_male_t) + β₂ Δ log (Trade_t) + β₃ Δ log (FDI_t) + ε_t            ...(2)

 
Where,
Log(LFP_male_t): Log of male labor force participation rate.

Model C: Female LFP
 

                     Δ log (Emission_t) = α + β₁ Δ log (LFP_female_t) + β₂ Δ log (Trade_t) + β₃ Δ log (FDI_t) + ε_t             ...(3)

 
Where,
Log(LFP_female_t)= Log of Female labor force participation rate.

Table 1 shows substantial variations across the study variables. The average CO₂ emissions stands at 2541.78 metric tons, ranging from 1622.89 to 3411.74, suggesting a steady but notable spread over 2000-2022. Trade averages 41% of GDP with moderate dispersion. FDI inflows are relatively low, averaging only 1.47% of GDP with low variability. LFPR highlights a persistent gender gap in the labor market. The overall stands at 58% of population, but male LFPR is consistently higher with a range of 79% - 87%, while female LFPR only range between 28% to 37%. Report argues that achieving environmentally sustainable growth necessitates addressing social issues through inclusive work practices (Boone, 2019).


       
Fig 1 shows that from 2000, emissions rose steadily until 2018, followed by a fluctuation and a sharp decline in 2020 likely associated with the Covid-19 Pandemic and a subsequent rise in 2022. Fig 2 shows that the overall LFPR% gradually declines from 2000 to 2022, primarily driven by the fall in female LFPR, while male LFPR also declines gradually. Fig 3 shows the inverse movement of LFPR and CO₂ emissions, while CO₂ emissions gradually rise, LFPR shows a gradual decline. This highlights the contrasting dynamics of labor force participation and environment pressure. Fig 4 demonstrates a strong negative correlation between labor force participation rate (LFPR) and CO₂ emissions across all categories. The total LFP shows a correlation of -0.96 with emissions, male LFP exhibits the strongest association (-0.98), while female LFP also demonstrates a robust negative relationship (-0.92). These results suggest that declines in labor force participation are closely associated with rising CO₂ emissions over the study period. This indicates that economies with higher LFPR have transition towards more efficient and less carbon-intensive activities.








       
Before carrying out the empirical analysis, we carried out preliminary tests.  All variables were first transformed using the natural logarithm. The Augmented Dickey-Fuller (ADF) test was initially applied to the log-transformed variables to detect the presence of unit roots. However, ADF test may have low power, especially in small samples and may fail to reject the null even when the series is stationary. To strengthen the validity of the results and account for ADF’s limitations, two complementary tests were employed: KPSS and PP Test. (Differenced data were not stationary after first differencing as per ADF test, but stationary using KPSS). Variables that were found to be non-stationary in levels but stationary after first differencing (i.e., integrated of order 1, I(1) were transformed using the first difference of the logged variable (Table 2).


       
The model result reported in Table 3 substantiate the inverse relationship between LFPR and CO₂ emissions as further evidenced by the corresponding scatterplot analysis. In the Total LFPR model, the coefficient of Δ Total LFPR is -1.288 (p<0.05), indicating a 1.29% reduction in CO₂ emissions with a 1% increase in labor force participation. Similar findings also been reported in the study of Lasisi et al., (2020). A stronger negative coefficient of -2.628 (p<0.1) in the Male LFPR model aligns with the tight scatter pattern in the Fig 1, indicating a larger but less significant effect. The female LFPR model shows a smaller but significant coefficient of -0.496 (p<0.05), suggesting a weaker correlation between the increase in female involvement and emission reductions. All models show a positive and substantial effect (0.220-0.223) from trade (% of GDP). Thus, trade openness increases emissions. However, FDI (% of GDP) has a small negative influence. The R² values (0.563 for total, 0.496 for male and 0.587 for female) indicate some explanatory power with the model for female LFPR demonstrating superior fit. Generally, an increase in labor, particularly male labor, correlates with a reduction in emissions. However, trade expansion raises them.


       
Table 4 illustrates that Models A and C both meet autocorrelation and homoscedasticity criteria, thereby reinforcing the reliability of their estimations. Model B exhibits autocorrelation (DW p=0.0446), raising concerns about potential bias in the standard errors. This indicates that, despite male participation having the most significant negative impact on emissions its statistical reliability is lower compared to the female participation model.


       
Table 5 indicates that absence of multicollinearity suggesting LFPR, trade and FDI each contribute to explaining variations in emissions independently and that the estimated coefficients remain unaffected by any overlapping explanatory influence. The distinct roles of LFPR in reducing emissions and trade in increasing emissions are statistically significant. The findings from the Shapiro-Wilk test presented in Table 6 implies that the residuals exhibit a normal distribution, thereby reinforcing the validity of OLS regression and enhancing the reliability of models.




       
The findings suggest that boosting labor force participation, particularly among women, plays a crucial role in reducing emissions, whereas greater trade openness correlates with an increase in emissions. Although the male LFP shows the highest emission-reducing coefficient, diagnostic evaluations reveal that the female LFP model exhibits greater statistical robustness. Similar findings reported by Efobi et al., (2018) and Achuo et al., (2022) that female LFPR enhances environmental sustainability. The findings indicate that incorporating all individuals into the workforce may serve as a strategy for attaining sustainable growth over the long term. The findings highlight the significance of incorporating green trade regulations and innovative technologies to mitigate the environmental impacts associated with globalization.

The study finding reveals statistically significant association between the rise in labor force participation and the reduction in CO₂ emissions. Empirical evidence underscores the significance of enhancing the working environment for the labor force, along with their health and education, as it plays a crucial role in reducing CO₂ emissions and mitigating environmental harm. Consequently, it is crucial to implement initiatives that improve employee competencies through training, emphasizing the adoption of energy-efficient tools to foster sustainable growth. Improving the educational system will undoubtedly foster innovation and skill development in the workforce, facilitating a transition towards sustainable green growth. There is also need inclusive economic growth model, particularly one that factors in gender classification or representation, should not be overlooked in Country like India. Thus, the role of government is crucial in this process. The study has limitations in selecting data and time period as for variables undertaken. It has also limitations as the findings are limited to the direct effect of LFPR on environmental degradation. Furthermore, the current study has effectively established possibilities for further research. Research should explore the indirect channels through which LFPR impacts the growing environmental degradation. Also, future studies could examine the environmental effects on social classifications, green employment, empowerment, quality of work etc.

This study did not receive any specific grant from funding agencies in public, commercial, or not for profit sectors. 
 
Disclaimers
 
The views and conclusions expressed in this article are solely those of the authors and do not necessarily represent the views of their affiliated institutions. The authors are responsible for the accuracy and completeness of the information provided, but do not accept any liability for any direct or indirect losses resulting from the use of this content.
 
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The authors declare that there are no conflicts of interest regarding the publication of this article. No funding or sponsorship influenced the design of the study, data collection, analysis, decision to publish, or preparation of the manuscript.