Impact of Social Insurance Contributions on Wages

  • Xinxin Ma


The Chinese government enforced the public security system reform during the economic transition period; the insurance premium which can be thought of as a kind of payroll taxes are nearly 40% of total wage. It is thought the enterprises may transfer the payroll taxes to worker by reducing the worker’ wage. Does the payroll taxes influence wage? Chapter  10 employs an empirical study using the enterprise panel survey data. It is found that in general, the payroll taxes do negatively affect the worker’s wage level, the enterprise may transfer the payroll taxes rise to workers. Moreover, even though the payroll taxes rise may decrease the worker wage level for both the public and private sectors, the negative effect is greater for the private sector (FOEs, HTOEs, POEs, and COEs) than for the public sector (SOEs). It should be noticed that the social security coverage scale spreading from the public sector to the private sector may increase the welfare of workers in the private sector, whereas the harm by the social security system reform is greater for the workers in the private sector than those in the public sector, it is a new inequality problem which should be considered.


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© The Author(s) 2018

Authors and Affiliations

  • Xinxin Ma
    • 1
  1. 1.Hitotsubashi UniversityTokyoJapan

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