Research On The Employment Effects Of The Employer's Social Insurance Contribution Rate

Social security tax originated from the later period of The Industrial Revolution when the night watchman state transited to social state.It breaks economic and efficient taxing rule what the classical political economics advocates,leading to many critics.The paper shows the mechanism of employer'social insurance contribution rate affecting employments and concluded with the below summaries:First of all,there is a great gap between legal and actual employer'social insurance contribution rate.The legal employer'social insurance contribution rate levels around 30%.After several adjustments in 2015 and 2016,it has been cut down around 17.5%.It is estimated about 20.92% of actual contribution rate using the macrolevel data and 19.5% using the microlevel data.According to evolutionary stable strategy,the gap is resulted from drawbacks in the design of system and government's lack of policy enforcement.Secondly,the Chinese employer'social insurance contribution rate is much higher than OECD countries.The average contribution rate of OECD countries is 19.61%,much lower than legal contribution rate but equals to actual contribution rate in China.Considering the economy developing stage,it is a indisputable fact that the contribution rate are excessive.Comparing with OECD countries,the pension insurance contribution rate in China is in the medium level.However,when comparing the public pension plan,the pension insurance contribution rate in China ranks 3rd.Under the same replacement rate level,China needs higher pension insurance contribution rate.Same situation exsists in contribution rate of medical insurance,employment insurance and work-injury insurance.In brief,there is room for lowering our social insurance contribution rate.Thirdly,according to the results of analysis using macrolevel data,the effect of employers' contribution rate to employment growth is fluctuant,but become positive when to employment-wage elasticity.It is positive to private enterprises' employments growth and employment-wage elasticity but negative to SOEs'.It means that social insurance contribution rate is beneficial to private enterprises' employment growth.Fourthly,according to the analysis of GMM regression,employer's social insurance contribution rate is negative to employments.As the employer's social insurance contribution rate increases 1%,the employments will decrease 3.84%.The eployments of private enterprises,small-sized enterprises,labor-intensive enterprises and enterprises in eastern and middle areas are more affected by employer's social insurance contribution rate.Thus,the high employer's social insurance contribution rate has led to conflicts with employments,the security and employments need to be balanced.Therefore,lowering the employer's social insurance contribution rate is a unescapable choice.At the same time,oldage pension reforming should be the supporting measure.The responsibilities to the transitional cost should be clarified,system's parameter needs to be adjusted and the multiold-age security systems should be accelerated.