Estimating the Incidences of the Recent Pension Reform in China: Evidence from 100,000 Manufacturers
AbstractAn ongoing reform in China mandates employers to contribute significant amounts to employee pension funds. The current study estimates the impact of this reform on the wage, employment and performance of firms using data from over 140,000 medium and large manufacturers in China during 2004 and 2006. We find that the nominal wages of employees were rigid but their real wages may have declined due to the pension reform. In addition, we find an interesting dichotomy in the incidences of pension reform. In localities with high agglomeration levels, firms\' profits declined because the pension burden could not be fully transferred to employees. In less agglomerated jurisdictions, firms responded positively to pension reform, possibly because local governments over-subsidized the pension costs as a way to attract investment.
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Bibliographic InfoPaper provided by BBVA Bank, Economic Research Department in its series Working Papers with number 1138.
Length: 15 pages
Date of creation: Dec 2011
Date of revision:
China; Pension; incidence;
Other versions of this item:
- Zhigang Li & Mingqin Wu, 2013. "Estimating The Incidences Of The Recent Pension Reform In China: Evidence From 100,000 Manufacturers," Contemporary Economic Policy, Western Economic Association International, vol. 31(2), pages 332-344, 04.
- H32 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Firm
- H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
- J2 - Labor and Demographic Economics - - Demand and Supply of Labor
This paper has been announced in the following NEP Reports:
- NEP-AGE-2012-01-25 (Economics of Ageing)
- NEP-ALL-2012-01-25 (All new papers)
- NEP-DEV-2012-01-25 (Development)
- NEP-LAB-2012-01-25 (Labour Economics)
- NEP-TRA-2012-01-25 (Transition Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Angel de la Fuente & José E. Boscá, 2011.
"Gasto educativo por regiones y niveles en 2005,"
UFAE and IAE Working Papers
873.11, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
- Javier Alonso & Jasmina Bjeletic & Carlos Herrera & Soledad Hormazabal & Ivonne Ordonez & Carolina Romero & David Tuesta & Alfonso Ugarte Ruiz, 2010. "Projections of the Impact of Pension Funds on Investment in Infrastructure and Growth in Latin America," Working Papers 1002, BBVA Bank, Economic Research Department.
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