 Labor protection and the efficiency of human capital investmentJing Guo, Qi Tang and Guangzhu Jin Economic Analysis and Policy, 2021, vol. 69, issue C, 195-207 Abstract: This paper investigates the impact of labor protection on the labor investment efficiency of labor-intensive enterprises. Based on data from A-share listed companies in China, we introduce difference-in-differences design to identify the impact of The Labor Contract Law on enterprises’ employment investment and business decision-making. We find that improving labor protection reduces the efficiency of labor investment in labor-intensive enterprises. Improvements in labor protection also cause over-employment, especially in state-owned enterprises. Further tests suggest that labor protection affects the expansion of employees in different ways in state-owned and private enterprises. In private enterprises, labor protection promotes the adjustment and upgrading of human capital structures. We also find that labor protection can improve labor costs for labor-intensive enterprises, but that it has a negative effect on enterprise innovation. This paper provides a clear policy reference for understanding the structural distortion of human capital in the transformation and upgrading of Chinese enterprises. Keywords: Efficiency of labor investment; The Labor Contract Law; Labor protection; Labor intensity (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:ecanpo:v:69:y:2021:i:c:p:195-207 DOI: 10.1016/j.eap.2020.12.006 Access Statistics for this article Economic Analysis and Policy is currently edited by Clevo Wilson More articles in Economic Analysis and Policy from Elsevier |
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