Economic Analysis Of Social Security For Migrant Workers

Migrant workers which emerged as a new labor force with the industrialization and urbanization process of China’s reform has made a significant contribution for China’s modernization. However, migrant workers are facing many problems, among which the situation of social security for migrant workers is grim and need to get resolved. In 2010, China promulgated the "Social Insurance Law", the law clearly pointed out that enterprises should buy social insurance for migrant workers. However, according to the monitoring survey report released by the National Bureau by the end of May 2013, at the end of 2012, the situation of social security for migrant workers remains worrying.In order to explore the reasons for the low rate of social security enrollment among migrant workers, and the impact of the government policies relating to the implementation of the social security of migrant workers on the society and economy, the paper leads into governmental supervision and management when considering enterprises implementing social protection policies and establishes a general equilibrium on the base that the rural and urban workers are paid with different wages. After the theoretical analysis, we make empirical analysis to verify the theoretical results. With this model, we draw three main conclusions:(1)labor market reform will reduce the effective supply of migrant workers and the demand for migrant workers, and improve formal employment, wages for migrant workers and the rare of migrant workers participating in social insurance; (2) Government increasing the audit probability will improve formal employment and the rare of migrant workers participating in social insurance, but it will reduce the demand and wages of migrant workers and the effective supply of migrant workers. In addition, the negative impact of improving government audit probability on total employment is very small in developed countries, but it’s great in developing countries; (3) Government increasing social security rates will increase the economic need for migrant workers and effective supply of migrant workers in the economy, but it will reduce formal employment and the wages and insurance rate of migrant workers. Whether in developed or developing countries, improving the social security rates will reduce total employment.