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Firm Compliance With Social Insurance Obligations Where There Is A Weak Surveillance And Enforcement Mechanism: Empirical Evidence From Shanghai

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Listed:
  • Pushkar Maitra
  • Russell Smyth
  • Ingrid Nielsen
  • Chris Nyland
  • Cherrie Zhu

Abstract

. This article examines why firms in Shanghai comply or over‐comply with social insurance obligations in a regulatory environment where the expected punishment for non‐compliance is low. Our first finding is that firms found to be in non‐compliance in the first audit in 2001 were moved into a separate violation category and the probability of being reaudited in 2002 was significantly higher if the firm was in that category. Our second main result is that, across the board, firms which were reaudited continued to underpay in 2002 but the extent of underpayment was significantly reduced.

Suggested Citation

  • Pushkar Maitra & Russell Smyth & Ingrid Nielsen & Chris Nyland & Cherrie Zhu, 2007. "Firm Compliance With Social Insurance Obligations Where There Is A Weak Surveillance And Enforcement Mechanism: Empirical Evidence From Shanghai," Pacific Economic Review, Wiley Blackwell, vol. 12(5), pages 577-596, December.
    • Handle: RePEc:bla:pacecr:v:12:y:2007:i:5:p:577-596
    DOI: 10.1111/j.1468-0106.2007.00373.x
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    References listed on IDEAS

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    1. Lutz, Stefan & Lyon, Thomas P & Maxwell, John W, 1998. "Strategic Quality Choice with Minimum Quality Standards," CEPR Discussion Papers 1793, C.E.P.R. Discussion Papers.
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    Cited by:

    1. Rickne, Johanna, 2013. "Labor market conditions and social insurance in China," China Economic Review, Elsevier, vol. 27(C), pages 52-68.
    2. Russell Smyth & Ingrid Nielsen & Qingguo Zhai, 2010. "Personal Well-being in Urban China," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 95(2), pages 231-251, January.
    3. Wei Cui & Jeffrey Hicks & Max Norton, 2022. "How well-targeted are payroll tax cuts as a response to COVID-19? evidence from China," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 29(5), pages 1321-1347, October.
    4. Wen Xin & Russell Smyth, 2010. "Economic Openness and Subjective Well‐being in China," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 18(2), pages 22-40, March.
    5. Li, Xiaoxue & Tian, Liu, 2020. "The effect of non-employment-based health insurance program on firm's offering of health insurance: Evidence from the social health insurance system in China," Journal of Comparative Economics, Elsevier, vol. 48(4), pages 997-1010.
    6. Nielsen, Ingrid & Smyth, Russell, 2008. "Who bears the burden of employer compliance with social security contributions? Evidence from Chinese firm level data," China Economic Review, Elsevier, vol. 19(2), pages 230-244, June.
    7. Cheng, Zhiming, 2022. "Communist Party branch and labour rights: Evidence from Chinese entrepreneurs," China Economic Review, Elsevier, vol. 71(C).
    8. Cousins, Mel, 2022. "Elective social insurance systems in developing East and South-East Asian countries," MPRA Paper 114078, University Library of Munich, Germany.

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    More about this item

    JEL classification:

    • H83 - Public Economics - - Miscellaneous Issues - - - Public Administration
    • K20 - Law and Economics - - Regulation and Business Law - - - General
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation

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