Research on the Effects of Corporate Social Insurance on Total Factor Productivity

Social insurance is an insurance arrangement that the country or the government collects from some specific groups, such as enterprises, through compulsory means and then sets up social security funds to guarantee the basic living standards of specific groups of society, including the old, weak, sick, disabled, pregnant and temporarily unemployed. It is a legal responsibility and obligation that enterprises or employers must undertake and in the financial aspect, it is a rigid labor cost besides the wages. In China, enterprise is the main object that should afford the payment of social insurance and its contribution rate is higher than the international level, followed by some negative effects. This article prefers to study the correlation between corporate social insurance and TFP and find a reasonable range of the contribution rate based on the other researchers’ data and viewpoints. It may also provide some possible suggestions to the governments to decrease the burden of firms and ensure the development of a welfare security system.