Joint Impact Of VAT Transition And Labor Contract Law On Employment

2008 is a crucial year for China's economic reform process.The VAT reform and the Labor Contract Law have been fully implemented from the year.Whether the two promote or inhibit the employment in China,whether they offset each other or promote each other,there is still no clear answer.Therefore,the two reforms have been implemented for ten years,the timing of evaluating their joint impact on employment levels is very mature.Firstly,based on the literature review at home and abroad,this paper selects the data of 2,750 listed companies between 2004 and 2017,and uses the new employment rate as the core variable to describe the typical facts of the changes of core variables around 2008.The results show that the employment rate of new enterprises in China changed significantly between 2004 and 2017,and the employment level increased significantly after the reform in 2008.At the same time,the changes in labor-intensive,capital-intensive and knowledge-intensive enterprises differ:Significantly lower in intensive enterprises,slightly reduced in capital-intensive enterprises,and significantly increased in knowledge-intensive enterprisesSecondly,this paper uses DID test,Chow Test for Parameter Stability and OLS regression model to empirically test the independent impact of VAT transformation and Labor Contract Law on employment.The empirical results show that from the whole industry enterprises,the VAT transition has played a role in restraining employment,and the Labor Contract Law is exactly the opposite;for different types of enterprises,the effect of the two policies respectively differs.The employment levels of intensive and capital-intensive firms have had a negative impact,with positive impacts on knowledge-intensive firms,and the magnitude of the impact on three different types of firmsThirdly,on the basis of considering the individual influence,this paper uses the triple difference method to empirically test the common effects of the VAT transition and the Labor Contract Law on employment in China.The results show that for the whole industry enterprises,the two policies jointly promote employment growth;in terms of different types of enterprises,the employment of labor-intensive enterprises is hit by the policy,the employment of knowledge-intensive enterprises is promoted together,and the impact of the policy on the employment of capital-intensive enterprises is not significant.Finally,summarize the paper and propose feasible policy recommendations for government,labor-intensive enterprises,capital-intensive enterprises and knowledge-intensive enterprises according to relevant conclusions.