The Impact of Corporate Employment: Minimum Wage or Social Insurance Policy? — Evidence from China
By Junpeng di, Wanhe li & Mingyuan zhang
China’s minimum wage standards and enforcement have been on the rise, and the academic community generally believes that minimum wage increases enterprise labor costs and has an important impact on employment. However, less attention has been paid to social insurance, which is also a cost for Chinese companies. This paper considers both minimum wage and social insurance policy at the same time, and firstly analyzes the influence mechanism of the two on the labor market from the theoretical level. Secondly, National Tax Survey data from 2007 to 2016 and the matched minimum wage data were used to test. The empirical analysis shows that given social insurance, the increase of minimum wage will significantly reduce the employment of enterprises; When enterprises face the minimum wage and social insurance policy at the same time, the adjustment of social insurance policy can alleviate the unemployment effect of the minimum wage. Furthermore, we consider the Heterogeneity of enterprises with different ownership, industries, and regions. This study has important implications in terms of policy: minimum wage and social insurance policy should be used together to ensure that the basic living standards of workers are protected without increasing the burden on enterprises.
Source SSRN
