Research On The Incidence Of Firms’ Pension Contribution Rate On Urban Employment

With the establishment of China’s Social pension System,the pension contribution paid by firms has been the main source of Social pensio Fund,which lays a financial foundation for the sustainable operation of China’s Social pension System.At present,China has reduced the firms’ contribution rate from 20% to 16%,but the firms’ contribution rate is still far higher than the majority of national firms’ contribution rate.Like critics in Europe and Latin America,China’s high rate of corporate pension contributions is blamed for driving up corporate labor costs and discouraging employment.At a time when the economy is under downward pressure in the face of world trade disputes and employment has not been effectively alleviated,based on the Social pension,this paper studies the incidence of the firms’ contribution rate on the urban employment,and discusses the ways to reduce the firms’ contribution rate.Using the relevant data and methods,this paper draws the following conclusions.First,according to the numerical simulation of the overlapping generation model,it is found that the firms’ pension contribution rate is about 9% when the delayed retirement is not taken into account,when the delayed retirement is taken into account,the contribution rate is about 6%.Whether or not there is a delay in the retirement,the current firms’ pension contribution rate is still very high,and there is a large downward space.Second,the PVAR study found a one way relationship between urban employment and firms’ pension contribution rate,that is,urban employment has no effect on firms’ pension contribution rate,while the firms’ pension contribution rate has a negative effect on urban employment,and this effect exists in both short-term and long-term,but the short-term influence is stronger than the long-term.Third,according to the fixed effect model and the random effect model,we find that the firms’ contribution rate has the crowding-out effect on urban employment,and the crowding-out effect on regional urban employment is different.The overall level of urban employment will rise by 0.084%,0.053% in the eastern region,0.0235% in the central region and 0.1% in the western region for every 1% drop in firms’ contribution rate.But the central region was not significant at the 5% significance level.Fourth,with the increase of explanatory variables,the impact of firms’ pension contribution rate on urban employment level is not reduced but increased.In 2018,the number of urban employees in eastern regions could increase by 360 thousand,in central regions by 70 thousand and in western regions by 210 thousand.Fifth,through the impact of various factors on thepension contribution rate research found that if the old-age dependency ratio increased by 1%,firms’ contribution rate increased by 0.7%.The coverage of old-age insurance rose by 1%,while the firms’ contribution rate dropped by 0.3%.If the compliance rate,payment base and wage growth rate increased by1%,the firms’ contribution rate decreased by 0.2%.When the pension adjustment coefficient is 10% of the wage growth rate,the firms’ contribution rate increases by2%,and when the pension adjustment Coefficient and the wage growth rate are the same,the firms’ contribution rate increases by 20%.If the retirement age is delayed by 1 year every year,the firms’ contribution rate will decrease by 1%,and the enterprise pension insurance contribution rate will decrease by 0.3% if it is delayed by 3years.This paper is mainly divided into four parts.The first part is the introduction,The second part is the related theory,The third part is the empirical part,The fourth part makes a summary of this paper and puts forward some policy suggestions.