doi: 10.18178/joebm.2026.14.4.959
Social Security Contribution Collection, Corporate Responses, and the Labor Income Share: A Quasi-Natural Experiment from New Social Security Regulations
TianjingWang *
,
Zhebing Wang
- Department of Financial Management, Faculty of Accounting, Capital University of Economics and Business, Beijing, China
- Manuscript received August 12, 2026
- accepted October 7, 2026
- published October 27, 2026
Abstract
Taking the reform of national and local tax collection administration as a quasi-natural experiment, this paper adopts the difference-in-differences model to explore how tightened social security collection affects corporate labor income share and its transmission mechanisms. The baseline regression result shows that the core DID coefficient is −0.034, which is statistically significant at the 1% level, indicating that stricter social security enforcement significantly lowers firms’ labor income share. Firms cope with rising labor costs via three strategies: replacing regular staff with outsourced flexible employment, shifting production abroad to avoid high domestic labor expenses, and conducting process innovation to substitute labor with capital. Heterogeneity evidence further demonstrates that the adverse impact is stronger for enterprises featuring higher payroll costs and weaker market power. From the firm-level strategic adjustment perspective, this study clarifies the inherent correlation between social security collection regulation and income distribution. It supplements new empirical evidence on institutional shocks to labor income share, and delivers policy suggestions for improving social security collection regimes and income distribution equity, alongside operational hints for firms to coordinate social security compliance and long-term growth.
Keywords
- social security contribution collection reform
- labor income share
- difference-in-differences method
- flexible employment
- overseas production transfer
- process innovation
- quasi-natural experiment
How to Cite
TianjingWang and Zhebing Wang, "Social Security Contribution Collection, Corporate Responses, and the Labor Income Share: A Quasi-Natural Experiment from New Social Security Regulations," Journal of Economics, Business and Management, vol. 14, no. 4, pp. 291-295, 2026. https://doi.org/10.18178/joebm.2026.14.4.959
Copyright & License
Copyright © 2026 by the authors. This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited (CC BY 4.0).