Social Insurance Law Research Articles

Experience of Reforms to the State Social Insurance in the Republic of Latvia after Restoring the Independence of the State de facto

The article is dedicated to an overview of the reforms to the state social insurance law and criticism of some aspects in the reforms carried out in the Republic of Latvia after the restoration of independence de facto in 1990–1991, analysing the rights and obligations of the State, the employer and the employee in the area of social insurance. On the basis of research outcomes, the author concludes that the Soviet understanding of the social insurance law was soon dispensed with. However, it is debatable whether the reforms of social insurance have been successful enough. Although the social insurance contributions are paid in the amount of at least “the minimum amount of the object of mandatory contributions”, it is not clear whether, if an insured case sets in, the disbursed benefit ensures a life that is worthy of human dignity because the subsistence minimum has not been calculated in Latvia. Moreover, not all socially insured persons have all forms of social insurance. Hence, reforms in the area of social insurance cannot be regarded as being completed.

Social insurance law and robot adoption in China

ABSTRACT This paper uses a unique firm-level dataset and employs a difference-in-differences strategy to examine the effects of the Social Insurance Law on firms’ robot adoption in China. We find that the mandatory social insurance contribution significantly reduces firms’ robot adoption. The effect is driven by more conservative cash-holding and debt-financing strategies among affected firms. Our findings highlight that governments should balance objectives between improving labour standards and promoting new technologies adoption.

Social insurance law and corporate performance in China

Social Insurance Contributions exert a liquidity constraint on firms and hence influence the performance of firms. By exploiting the enforcement of China's Social Insurance Law (SIL) in 2011 as a quasi-natural experiment, this paper studies the impact of social insurance contributions on the performance of enterprises through a difference-in-differences method. We find that SIL negatively affects the performance of firms, and this effect is more pronounced in firms with weaker cost-shifting capacity. Mechanism tests prove the liquidity constraints channel through the perspective of the firm's cash flow, accounts payable, investment-cash flow sensitivity, and scale of operations. Our findings demonstrate that firms cannot fully mitigate the negative impact brought by Social Insurance Contributions.

How does enforcement of social insurance law minimize income gaps within firms: From a perspective of worker bargaining power

Attaining common prosperity is a fundamental necessity for Chinese modernization, and the key is to minimize the income gap at the micro level. This paper utilizes the implementation of the Social Insurance Law as an external policy shock to create a quasi-natural experiment. Based on A-share listed firms spanning 2007 to 2019, the difference-in-difference (DID) method was adopted to investigate the effects of enhanced social security collection and management on income disparity within firms. This paper reveals that implementing the Social Insurance Law can effectively narrow the income gap within firms and the impact mainly through strengthening workers' negotiating power.

Social insurance contribution and firms’ digital transformation: Evidence from China

ABSTRACT We examine the relationship between social insurance contribution and firms’ digital transformation by using the data of Chinese firms listed in the Shanghai Stock Exchange (SHSE) and the Shenzhen Stock Exchange (SZSE) from 2007 to 2017. We find that social insurance contribution has increased the degree of firms’ digitalization transformation. We also explore two important mechanisms through which the Social Insurance Law (SIL) affects firms’ digital transformation: cash flow effect and factor substitution effect. The results indicate that the positive impact of the social insurance contribution on firms’ digitalization is more significant for firms that are not state-owned, have smaller sizes, labour intensive, with low tax burden, low financial leverage, and low productivity. One important implication of our study is that firms’ digitalization can be a strategic choice made by labour-intensive firms to overcome rising cost of labour as a result of the SIL.

Social insurance law and firm markup in China

As labor protection policies become widespread globally, assessing the economic impact of these policies is critical to business decision-making. However, the relationship between labor cost and enterprise markup has not been confirmed in the existing literature. Based on China's Social Insurance Law, we examine the issue by using a difference-in-differences model and the data from Chinese listed firms. We find that after the implementation of the Social Insurance Law, the markups of labor-intensive firms were significantly reduced compared with non-labor-intensive ones. The main mechanism driving the markup decline is the price effect caused by market share competition. Further tests suggest that the adverse influence is greater for firms with fewer financing constraints, enterprises in highly marketized areas, and nonstate-owned ones. Our research shows that the mechanism of labor protection policies' impact on markup should not only analyze the factor market but also extend to the product market.

Impact of social insurance law on total factor productivity: evidence from Chinese micro and small businesses

ABSTRACTOur study investigates the impact of China’s 2011 Social Insurance (SI) Law on the Total Factor Productivity (TFP) of micro and small businesses (MSBs). Using the difference-in-differences (DiD) model, we found that the SI Law’s implementation resulted in a significant decline in TFP levels within MSBs owing to increased social security contributions. Mechanism analysis indicates that the incremental costs cannot be shifted onto employees through wage adjustments or workforce reduction and curb firms’ capital investments, subsequently affecting capital intensity and overall business productivity. Furthermore, heterogeneity analysis underscores that the SI Law’s effects on TFP are most pronounced in MSBs within the manufacturing sector, characterized by financial constraints, or situated in provinces with high enforcement intensity and greater factor market distortions. Further analysis reveals that the SI Law reduces labour productivity levels among MSBs, with the majority of the impact directly stemming directly from the SI Law, while the remaining effect is mediated through capital-labour intensity and TFP, respectively. Our study contributes to the existing literature by offering new insights from MSBs in an emerging market context, and the findings offer significant policy implications.

Labor protection and enterprise digital transformation: A quasi‐natural experiment based on the enforcement of Social Insurance Law in China

AbstractThis study examines the impact of Social Insurance Law in 2011 on enterprises' digital transformation, using a quasi‐natural experiment with difference‐in‐differences method. Implementation of the law contributes to enterprises' digital transformation. Mechanism tests reveal that implementation of the law promotes enterprise digital transformation by increasing labor costs. Heterogeneity analysis demonstrates that nonstate enterprises, enterprises with weaker financing constraints, and mature enterprises experience a more pronounced impact of the law. Enterprises in regions with highly integrated digital development and those in industries with a high level of digital transformation are more affected by the law.

Employee protection and trade credit: Learning from China's social insurance law

Employee protection and trade credit: Learning from China's social insurance law

Can social insurance contributions boost labor share?—Evidence from China’s social insurance law

Improving the factor income distribution is a crucial issue in the field of income inequality. Using large-scale data from China’s National Tax Survey from 2008 to 2016, this paper examines the impact of the implementation of the Social Insurance Law on firms’ labor share and its mechanisms. The results show that the Social Insurance Law significantly reduces firms’ labor share. Although it increases the firms’ social insurance rate and total amount of social insurance contributions, firms respond by reducing the number of employed labors and net wages to mitigate rising labor costs, as well as adopting alternative technological advancement patterns and capital deepening behavior, leading to a reduction in labor share. The weakening effects of Social Insurance Law primarily exist in non-SOEs, and MSEs, and firms faced with higher financial constraints and located in lower judicial quality areas. Our study suggests that stronger social security collection could account for the decline in labor share worldwide.

Unintended Consequences of Social Insurance Law on Stock Price Crash Risk: Quasi-Natural Experimental Evidence from China

ABSTRACT This study studies whether the Social Insurance Law implemented in 2011 affects the stock price crash risk. Using the data of Chinese listed companies from 2006 to 2018, this study uses the difference-in-difference method to show that the Social Insurance Law significantly reduces stock price crash risk, and when the tax department collects social insurance premiums, this inhibitory effect still exists, which depends on its taxation efforts. Mechanism analysis find that Social Insurance Law reduces agency costs and improves the transparency of enterprises, indicating that the behavior of enterprises to hide and hoard bad news is reduced. Finally, these effects are more pronounced for enterprises with poor corporate governance, enterprises in regions with poor marketization, and enterprises with lower media attention. Overall, this study provides new insights into reducing systemic financial risks and improving financial market stability.

Labor protection and the digital transformation of enterprises: Empirical evidence from China's social insurance law

Considering the implementation of the Social Insurance Law (SIL) as a quasi-natural experiment, we investigate the impact of labor protection on the digital transformation of enterprises. Our findings demonstrate that the SIL markedly expedites the digital transformation of enterprises. Mechanism analysis indicates that the SIL drives enterprises to shift their employment structure and provides important human capital conditions for digital transformation. The implementation of the law also helps to enhance the growth of enterprises, accelerating their digital transformation. Furthermore, non-state-owned and highly financing-constrained enterprises are more likely to respond to the reinforcement of labor protection by means of digital transformation.

Labor cost and stock price crash risk: Evidence from China

This study investigates the causal impact of labor cost on stock price crash risk in China. We utilize a quasi-natural experiment, the 2011 "Social Insurance Law," as an exogenous shock to labor cost and employ a difference-in-differences estimation. Our results demonstrate that strengthening labor cost significantly reduce the stock price crash risk, and this conclusion holds after conducting a series of robustness tests. Heterogeneity analysis indicates that this effect is more pronounced in state-owned enterprises and firms with low financing constraints. Our findings suggest that labor cost/protection generates positive outcomes at the firm-level, thereby promoting stock price stability.

Social insurance contributions and firms' debt concentration choice: A quasi-natural experiment based on the implementation of China's social insurance law

Using the implementation of China's 2011 Social Insurance Law as a quasi-natural experiment, we apply a difference-in-differences model to test the effect of social insurance contributions on firms' debt concentration choices. We find that when social insurance contributions increase, firms choose a debt structure with a higher concentration and fewer types of debt. Additional analyses show that this relationship is more pronounced in the sample in which firms have higher default risk, lower liquidation value, and lower accounting quality. A relatively concentrated debt structure enables firms to better negotiate with creditors to increase the probability of renegotiating debt with creditors and reduce the resulting bankruptcy liquidation. These results suggest that an increase in social insurance contributions leads to higher financial costs. Firms adjust their debt concentration when they need to renegotiate debt terms with their creditors in view of the higher probability of debt default. We examine the economic consequences of an increase in social insurance contributions from the perspective of a firm's debt concentration adjustment.

Compensation for moral damage to the employee caused by a workplace accident or an occupational disease (example of Turkey)

Workplace accidents not only threaten the lives of workers and damage the human capital of employers, but also increase the social costs of the State. Almost all industrialized countries have introduced laws and regulations to prevent industrial accidents and occupational diseases to reduce the cost of recovering such losses. Within the framework of this article, we turned to the example of Turkey, since this issue is regulated in sufficient detail in the legislation of this State. It has been established, that the main condition for an accident to be considered workplace accident is that the employer supervises the employee. Therefore, it is not necessary that the event takes place at the time when the employee is at the workplace or as a result of the employer’s wrongful actions. The definitions of the concepts of accident at work and occupational disease, enshrined in Social Insurance and Universal Health Insurance Law have been considered. According to the provisions of the same Law, the employer is obliged to report an accident or occupational disease to the head of the Social Security Institution (SSI) within 3 days after the event. It has been studied what types of benefits the victim can expect within social insurance. It has been determined, that claims for compensation for material and moral damage, as well as compensation for deprivation of material support as a result of an accident at work or occupational disease, are brought directly to the employer, since these types of damage are not compensated under social insurance. The conditions, the fulfillment of which is necessary to bring the employer to responsibility, have been investigated. The procedure for calculating moral compensation is not enshrined at the legislative level, but it was formed by the relevant practice of the Supreme Court. The factors that the court takes into account when determining the amount of compensation have been studied

Labour market effects of social insurance reform in Vietnam

This research provides the first evidence on how labour supply and earnings may adjust to the expansion of insurance benefits under the 2014 Social Insurance Law reform. The data for this study come from the Vietnam Labour Force Surveys. Both difference-in-differences and fixed-effect models are used. The estimated results reveal negative reform effects on the work duration and earnings of both sexes and for both rural and urban areas. They also point out some definite effects on different groups of local and migrant workers. However, little evidence on sick leave impact is found. The link between social insurance status and the labour market outcomes is scrutinized as well. The findings indicate that urban workers of both sexes benefit from accessing to compulsory insurance with respect to earnings, but only rural female workers do it. Moreover, these effects come mostly from groups of non-migrant workers.

Social insurance payments and labour investment efficiency: A quasi-natural experiment

ABSTRACT This study exploits the passage of the 2011 Social Insurance (SI) Law in China to investigate how a labour protection regulation affects corporate labour investment efficiency (LIE). We find that labour-intensive firms invest more efficiently in labour after the SI Law. Our findings are robust to alternative measures, selection bias and endogeneity concerns. Overall, our findings show that labour protection regulations have a profound impact on corporate employment decision-making.

Is “Well-Paid Employment” Worth It? Evidence from Corporate Investment in China

ABSTRACT This study investigates the effect of employee compensation on corporate investment decisions using a sample of Chinese listed companies during the period 2007–2019. We find that the improvement of employee compensation competitiveness reduces the overall investment level, but improves the investment efficiency, which supports the capital-skill complementarity theory and the liquidity constraint theory, rather than the displacement theory. We use the social insurance law as a quasi-natural experiment, and the adjustment of the personal income tax rate as an instrumental variable to relieve the endogeneity concern. In addition, cross-sectional analysis and mechanism analysis show that employee compensation competitiveness can crowd out enterprise investment and improve investment efficiency by increasing liquidity constraints, thereby improving the quality of human capital and increasing innovation. Overall, this study provides insights into how employee compensation reduces corporate investment and increases corporate investment efficiency in developing countries.

Konieczność zastosowania kanonicznego zdarzenia utraty stanu duchownego dla wyrejestrowania osoby duchownej z ubezpieczeń społecznych. Glosa aprobująca do wyroku Sądu Apelacyjnego w Rzeszowie – III Wydział Pracy i Ubezpieczeń Społecznych z dnia 21 sierpnia 2013 roku, III AUa 468/13

The commented judgement concerns the need to apply the term of canon law, which is the loss of the clerical state to determinate deregistration from compulsory insurance security. It should be identified with the statutory deadline for resignation from the clerical state. The legislator recognized the autonomy of the Catholic Church and rightly applied the terms defined by it. In this respect, he defined both the group of clergy subject to insurance, the moment of coverage of insurance obligation, as well as the event that indicates deregistration from insurance. It is not sufficient for exclusion from insurance a unilateral declaration of resignation from clerical state or pastoral functions undertaken, as the appellant believes. They have no effect in the forum of canon law and have no consequences in social insurance law.

ACQUISITION OF ENTITLEMENT TO PENSION BENEFITS

Discussion of the issue of the legal mechanism of acquiring pension and disability pension rights is necessary also for the reason that the phase of acquisition in abstracto has often been denied its importance in the process of formation and realization of the right to pensions. The interpretation of some insurance laws has given rise to the controversial view that regulations preventing the realization of rights acquired on the basis of previous regulations in the new legal order do not constitute a novelty or an exception in the system of social insurance law.