Research On The Employment Effects Of Employer Social Insurance Contributions

The state mandates employers to pay social insurance contributions(taxes)so that employees can enjoy social insurance benefits.But excessive employer social insurance contributions will increase the cost of employment and even squeeze profits,hindering the sustainable development of enterprises.With the rising economic uncertainty,increased downward pressure and the impact of the COVID-19 epidemic,enterprises are experiencing increased operational difficulties.The conflict between employee’s social insurance rights and labor rights,rest and leisure rights,and labor remuneration rights is prominent.Employer social insurance contributions will have a series of effects on employment,working hours and wages,which are receiving academic attention increasingly.Therefore,it is of great theoretical and practical significance to conduct a more indepth study on the employment effects of employer social insurance contributions.Through literature research,it is found that the current academic research surrounding the employment effects of employer social insurance contributions has the following shortcomings.For theoretical research:(1)Most studies use comparative static analysis to explore the impact of employer social insurance contributions on the labor market,based on the elasticity of labor supply and demand.Ignoring such realistic factors as the difficulty of clearing the labor market,wage stickiness,and the dynamic nature of labor.(2)Equating manufacturers’ labor input(employment volume)with labor factor input,ignoring the impact of employer social insurance contributions on working hours.For empirical studies:(1)The research around the impact of employer social insurance contributions on working hours ignores the context of China’s failure to adopt the standard working hours system strictly.(2)The research around the impact of employer social insurance contributions on wages fail to consider the differential impact on different types of employees.And fail to analyze the impact of employer social insurance contributions on employee wage rates.Since there is still room for further exploration,this paper adopts the disequilibrium analysis method,explores the employment effects caused by employer social insurance contributions,which based on the realistic factors such as the difficulty of clearing the labor market,wage stickiness,and the fact that labor has mobility,introduced working hours to distinguish labor input(employment volume)and labor factor input,and simulated the behavior of employers and employees.Using firm-level and individual-level data,this study empirically verifies the employment effects induced by employer social insurance contributions.For the theoretical analysis,this paper guided by Marx’s theory of surplus value,attributes the increase in labor costs and the decrease in disposable new output(profit)induced by employer social insurance contributions to the impact of employer social insurance contributions on the surplus value rate.Based on the employment effects of the employer’s means of increasing surplus value,revealed the main paths that employer social insurance contributions affect the employment,working hours,and wages at a theoretical level.The conclusion shows that employer social insurance contributions will reduce the employment absorption capacity of enterprises and lengthen the working hours of employees,but the impact on wage rates is uncertain.For the empirical analysis,using firm-level data,this paper verifies the effects of the cost burden of employer social insurance contributions and the burden level of employer social insurance contributions on the employment absorption capacity and wage level of enterprises.The cost burden of employer social insurance contributions refers to the proportion of employer social insurance contributions in labor cost,which can measure the relationship between employer social insurance contributions and labor cost.The burden level of employer social insurance contributions refers to the proportion of employer social insurance contributions in the new output value,which can measure the relationship between employer social insurance contributions and the new output value.Using individual-level data,this paper verifies the effects of employer social insurance contributions on employees’ working hours and wage rates.The results show that:(1)The rising cost burden of employer social insurance contributions will trigger employment extrusion.With the expansion of enterprise scale and the increase of organic composition of capital,the crowding out effect will be amplified.However,with higher wages and an increased economic level,the crowding out effect will be attenuated.(2)An increase in the burden level of employer social insurance contributions will have a negative impact on the employment absorption capacity of small enterprises,labor-intensive enterprises,low-wage enterprises,enterprises in the western and northern regions,and enterprises in low-growth regions.(3)Employer social insurance contributions will trigger longer working hours for employees who experience discrimination in the labor market,have lower levels of human capital,have written labor contracts with their employers,and are employed in non-public,east,central,northeastern,and southern regions.(4)A balanced and coordinated improvement of the economy will help mitigate the extension of working hours triggered by employer social insurance contributions.(5)The cost burden of employer social insurance contributions will have a negative impact on the wage levels of employees in small enterprises,labor-intensive enterprises,central and western regions,northeastern regions,northern regions,and enterprises in low-growth regions.(6)An increase in the burden level of employer social insurance contributions will have a negative impact on the wage levels of employees in small businesses,capital-intensive businesses,western regions,and businesses in low-growth regions.(7)Employer social insurance contributions will trigger a decrease in wage rates for those employees who experience discrimination in the labor market,have lower levels of human capital,have written labor contracts with their employers,and are employed in non-public,western,and northern regions.The innovation of this paper is reflected in the following three aspects.First,based on Marx’s surplus value theory,the theoretical mechanism of the employment effect caused by employer social insurance contributions is revealed in greater depth at the theoretical level.Second,using disequilibrium analysis,this paper analyzes the employment effects caused by employer social insurance contributions by simulating the behavioral choices of employers and employees,sort out the main paths of employer social insurance contributions on employment,working hours,and wages more systematically.Third,this paper uses micro data to verify the impact of employer social insurance contributions on employees’ working hours and wage rates,filling in the current domestic research on the impact of employer social insurance contributions on employees’ working hours and wage rates.Based on the above conclusions,this paper puts forward policy recommendations from three aspects.First,the social insurance system.Adjust the calculation method of employer social insurance contributions and approve the amount of contributions according to the new output value.Broaden the sources of social insurance funds to moderately ease the pressure of enterprise contributions,such as targeted issuance of special government bonds for social security funds and raising the shareholding of the Social Security Foundation.Reduce the contribution rates and regulate the payment behavior.Raise the level of social insurance coordination.Second,the labor market.Strengthen the regulations and implementation of labor law on working hours.Improve the human capital level of employees.Promoting labor-management cooperation.Third,macroeconomics.Promoting high-quality economic development continuously.Promote the economic level in a balanced and coordinated way.