“Quality Improvement” Or “Quantity Increase” ?

After China’s economy has entered a new normal,the domestic economy and employment situation are facing a severe test,and the labor market contradictions are prominent.The issue of the relationship between social insurance and employment has been the focus of discussion among scholars;high rates increase the cost of employment for enterprises,which choose to hire less in order to reduce the burden of contributions,thus worsening the employment situation.This paper constructs a quasi-natural experiment based on the reduction of pension insurance premium rates in some provinces in 2016,and examines the impact of social insurance premium reductions on employment from both quantitative and qualitative perspectives with the help of a double difference model,based on macro and micro perspectives.At the macro level,a database of prefecture-level cities from 2012-2018 is used to analyze the effects of fee reductions on the scale of urban employment,the level of employee wages,and the rate of social insurance participation.In the construction of the model,the prefecture-level cities corresponding to the provinces with fee reductions are set as the treatment group,and the prefecture-level cities corresponding to the provinces without fee reductions are the control group.It is found that in the quantitative dimension,the fee reduction reform significantly enhances the employment size in the labor market.In the qualitative dimension,the fee reduction reform increases the wage income level of employed persons,but has no significant effect on the participation rate of employed persons.To further examine the impact of fee reductions on micro-individual employment decisions and inter-individual differences,this paper uses the China Household Tracking Survey(CFPS)to examine the impact of fee reduction reforms on workers’ employment decisions and their returns.Again using a double difference model,controlling for individual characteristics,regional characteristics,and fixed effects,we find that: in terms of total employment,the fee reduction significantly increases the probability of employment,and women are more likely to obtain a job after the fee reduction than men,middle-aged people are more likely to obtain a job than young adults,and those with low education are more likely to obtain a job than those with high education.In terms of employment quality,social insurance fee reductions significantly increase individual wage income levels,and the effects are significant for the male and young adult groups.In addition,the reduction in fees led to a shift from informal to formal employment,increased employment stability,and more non-wage income such as bonus subsidies from formal employment.The empirical analysis based on macro and micro perspectives shows that the social insurance fee reduction reform has not only increased the quantity,but also improved the quality.Therefore,the social insurance fee reduction policy has an obvious effect of "stabilizing employment".Under the current environment of open epidemic control and gradual improvement of domestic economy,the social insurance fee reduction reform should be continued to further reduce labor costs,better play the role of employment promotion,and guarantee employment and economic growth.