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

Huiwan Wu

Finance Research Letters, 2024, vol. 62, issue PB

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.

Keywords: Social Insurance Law; Worker bargaining power; Income gaps; Common prosperity (search for similar items in EconPapers)
Date: 2024
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:62:y:2024:i:pb:s1544612324002289

DOI: 10.1016/j.frl.2024.105198

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