Pathways to Progress: Regulation Transformation and Social Security Enhancement in China

The sustainability of social security has become a critical global concern, yet the relationship between regulation and social security remains a subject of debate. Most scholars and policymakers primarily examine the role of social regulation in shaping social security while often overlooking the impact of market regulation. This study utilizes data on the relaxation of market regulation (RMR) from the China Marketization Index Report, combined with balanced panel data for 31 Chinese provinces from 2008 to 2019. Applying instrumental variable methods to address endogeneity concerns, this study empirically examines the impact of China’s RMR on social security levels (SSL) and its underlying mechanisms. The findings suggest that a one-standard-deviation increase in RMR intensity is associated with a 2.25% rise in SSL. The study also identifies social security expenditure and efficiency as mediating variables in the RMR-SSL relationship, while failing to support a mediating role for social security fairness. Moreover, regional heterogeneity tests indicate that the positive impact of RMR on SSL is significant only in regions with high marketization levels or strong economic development. These findings provide valuable insights for optimizing regulatory and social security reforms in China, while also offering useful guidance for emerging economies in prioritizing coordinated reform strategies.