The Impact Of Social Insurance Reform On Employmen

Before the reform the Premium Rate Phased Reduction of social insurance,scholars had always discussed that the high rates of social insurance in China would increase the labor cost and restrict the development of enterprises.Therefore,the labors would get lower salaries or welfare allowances who would pay for the cost of enterprises instead,or enterprises’ evading fees and reducing the scale of their employment.China has begun the reform of the Premium Rate Phased Reduction of the employment injury insurance,unemployment insurance,and maternity insurance since 2015.And the pension insurance rate for enterprises in some provinces and cities was gradually reduced from 20% to 19% in 2016,even reduced to 16% in 2019.For the effect of the fee reduction,most scholars analyze the impact of fee reduction on social insurance funds with their empirical summaries or by constructing an actuarial balance model,but few test that with practical research.At the same time,it should be paid more attention that the employment scale of China tends to decline because of the new trend of our economy,the slow down of the economy’s growth,the external environment and so on.According to the researches of early scholars,it was found that the high rate of social insurance would bring more employment.So it occurs to our mind whether the reform of the social insurance fee reduction in China would increase the employment or stabilizing it.But it has been contrary to the continuous declination of China’s total employment in recent years.Therefore,the relationship between the reform of social insurance fee reduction and the decline in employment is of great importance.Although many issues still needs to be tested,scholars can still do active and beneficial explorations based on existing policies and datum,which not only can clearly identify and accurately understand the effects of the reform,but also can provide theoretical support and empirical guidance for the next reform.Based on all above analysis of the backgrounds and current situations,this research has collected some basic datum such as the social insurance rate of cities from 2007 to 2018 in China,the urban basic information in the urban statistical yearbook,the social insurance contributions and financial position of listed companies,and the micro-survey data of CFPS in 2014,2016,and 2018 in order to form the basic database,and has chosen the Premium Rate Phased Reduction of the old-age insurance to start a series of discussions.This research aims to answer the following questions.First,whether the squeeze-out effect on employment that is popular with scholars still exists under the consideration of the reduction rate of social insurance.Second,what’s the direct effect of the reform of the Premium Rate Phased Reduction of social insurance? In other words,does the reduction of the policy fee lead to a decline in the real contributions of companies,and does the 1% lead to the 1%?Third,whether the reform of the Premium Rate Phased Reduction has a significant impact on the scale of employment of enterprises,and what’s the Impact mechanism if it is? Fourth,the rage of carrying out the Premium Rate Phased Reduction of social insurance,whether the direct beneficiaries are qualified? and does it affect the individuals? So what’s the response if it’s for individuals? And what kind of effects is the reform for the supply of labors?Around the above issues,this research has evaluated the direct effects and employment systematically and comprehensively by using Differential Estimation Method,based on the quasi-natural experiment of the reform of the Premium Rate Phased Reduction.And this is not only of great importance to the reforms of raising social security funds and the paying system,but also do great good to current studies.And it will also provide scholars with some references for further study.There are nine chapters in this research,and the details are as follows.First is the introduction.This chapter mainly introduces the topic background,the significance,methods,innovations and shortcomings of the research.And making preparations for the research by organizing the relevant literature on employment of social insurance at home and abroad,summarizing the current research situations,trends,shortcomings and so on.Second is the related theories of the social insurance effects on employment.There are three points in this chapter.First,introducing the evolution and inheritance of employment theory,briefly explaining the theories related to social insurance among employment theories,analyzing it from the aspects of Western economics and development economics.Second,analyzing the basis of social insurance payment.In other words,what does the salary depend on,how does it change,and how does the companies decide the the efficiency wages? And all these provide the theory support for the different declination rate between the policy and the reality.Finally,discussing the economy home of social insurance rate.That’s who should pay for the social insurance rate,the companies or labors,and explaining the transfer of labor’s cost and the demand of labors.Third is the reform and the situation of social insurance system in China.First of all,analyzing the historical evolution of social insurance rate changes and collections from the reform of it,the determination of rate,the Premium Rate Phased Reduction and the reform of the collection system.Then choosing the old-age insurance and medical insurance which are high among social insurance to analyse the current situations of social insurance rate in China from urban policy rate and actual corporate rate.And the results show that it’s will be a long time for the policy rate of social insurance in China to stay stable,while the actual rate varies greatly among the different companies.Fourth is the current situation and the change trend of employment in China.This chapter mainly talks about the current situation from three aspects.First,analyzing the macro-level urban employment situation and change trend from the perspective of time and space;Second,analyzing the current status of labor demand in listed companies from the perspectives of the ownership,scale,and industry of companies.Third,analyzing the current situation of the labor supply of micro-individuals from the perspectives of age,gender,and health.Generally speaking,the employment in China basically maintained a fluctuating and rising trend before 2014 and 2015,but it showed a fluctuating and declining trend after 2015.Fifth is the test of social insurance’s squeeze-out effect on employment.This chapter aims to build a panel data fixed-effect model to test the squeeze-out effect on employment by learning from existing research methods and using the rates after the reform of the Premium Rate Phased Reduction.The study found that an increase of1% in the pension insurance premium rate will lead to a decrease of 1.25% in the scale of employment of enterprises,and this is statistically significant at the level of1%.what’s more,it analyzed the heterogeneity of employment in different industries,different regions and different natures.Sixth is about the impact of the reform of the Premium Rate Phased Reduction on the actual rate.This chapter aims to discuss the impact of a 1% reduction in the pension insurance policy rate on the actual pension insurance rate of listed companies based on the quasi-natural experiment of the reform.The results show that the reform of the fee reduction has led to a decrease of about 0.4% in the actual corporate pension insurance rate.In addition,the effect of the fee reduction reform shows a certain degree of heterogeneity in different industries,different regions,different ownership systems,and different labor characteristics.And it is more significant in industrial,eastern regions,private and non-labor-intensive enterprises.According to the cost-benefit analysis method,this chapter separately calculates the social costs and social benefits brought by the fee reduction reform,and finds that the fee reduction effect will eventually bring 74.558 billion yuan and 56.347 billion yuan to industrial enterprises and private enterprises respectively.Seventh is about the impact of the reform of the Premium Rate Phased Reduction on the labor demand of enterprises.First,this chapter conducts a preliminary analysis of the mechanism of social insurance affecting employment;second,it estimates the impact of the reform of the pension insurance on the employment scale of listed companies through the double difference method.The results show that the fee reduction reform has led to a significant decrease in the scale of employment of enterprises by 8.32% under the condition of controlling only the enterprise characteristic variables.When all control variables are included,the reform will cause a significant decrease in the scale of employment by 6.65%,and the impact on the scale of employment of enterprises in different regions and industries is heterogeneous.This chapter further analyzes the mechanism of social insurance fee reduction affecting employment from the aspects such as the crowding-out effect of the actual rate,the driving force of cost transfer,and the thrust of enterprise upgrading.Finally,based on the social insurance collection system reform carried out in the earlier period,this chapter will examine the role of the collection and management system reform in the identification of causal effects by constructing a DDD model.And the results show that the employment reduction effect of the reform is relatively greater in the areas levied by social security departments compared with the taxation departments.Eighth is about the impact of the reform of the Premium Rate Phased Reduction on the supply of individual labor.Combined with social insurance policy rates and macro statistical data,this chapter aims to examine the impact of the reform on micro-individual labor supply under the framework of double differentiation by using CFPS survey data from 2014 to 2018.The results show that the fee reduction reform will reduce the probability of an individual’s labor supply by 1.72% without the control variables.And this conclusion is statistically significant at the level of 5%,the probability of supply drops to 1.93% after all variables are controlled.The heterogeneity analysis finds that the affected groups are mainly those aged 21-30 and those with an education level of college or above.In addition,it shows that the decline in employment are mainly outsiders who haven’t received the cash and in-kind subsidies by analyzing the impact mechanism from the perspective of insiders and outsiders who can gain the benefits of the enterprise.And further analysis finds that the reform can only affect the decision of the individual’s labor supply,but not the labor supply duration.And it may reduce the probability of individuals’ withdrawing from the labor market and early retirement.Ninth is the main research conclusions,policy recommendations and the directions for further studies.This chapter puts forward relevant policy recommendations such as the employment goals which the reform should consider carefully,the correct understanding of corporate social responsibility which should be strengthen,the excessive labor cost of enterprises which should be reduced,the reform between the insurance premium reduction and payment base should be implemented together.At the same time,the collection should be strictly regulated.