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

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  • Wu, Huiwan

Abstract

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.

Suggested Citation

  • Wu, Huiwan, 2024. "How does enforcement of social insurance law minimize income gaps within firms: From a perspective of worker bargaining power," Finance Research Letters, Elsevier, vol. 62(PB).
    • Handle: RePEc:eee:finlet:v:62:y:2024:i:pb:s1544612324002289
    DOI: 10.1016/j.frl.2024.105198
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    References listed on IDEAS

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    Cited by:

    1. Si, Deng-Kui & Meng, Mingyue & Wang, Jiaming & Zhou, Fuyou, 2024. "Does capital market liberalization increase corporate labor income share? Evidence from China," Economic Modelling, Elsevier, vol. 141(C).
    2. Cui, Yadong & Liang, Jun & Wang, Wei, 2025. "Social insurance contributions and labor income share—Evidence from China's Social Insurance Law," Socio-Economic Planning Sciences, Elsevier, vol. 97(C).
    3. Qian, Kun & Xu, Shiyu, 2025. "Implementation of the Social Insurance Law, mismatch in investment and financing maturities, and corporate innovation," International Review of Economics & Finance, Elsevier, vol. 101(C).
    4. Xu, Ying & Chen, Xinya, 2025. "How does the social insurance law affect enterprises' business credit?," International Review of Economics & Finance, Elsevier, vol. 102(C).
    5. Qu, Xianhe & Xia, Jie, 2024. "Environmental regulation and firms' trans-regional investment: Evidence from the implementation of the New Environmental Protection Law," Finance Research Letters, Elsevier, vol. 67(PA).
    6. Ouyang, Yuming, 2025. "Social insurance contribution rates, income levels, and corporate innovation," Finance Research Letters, Elsevier, vol. 74(C).

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