What determines the extent to which employers will comply with their social security obligations? Evidence from Chinese Firm level data

This paper aims to extend understanding of employer responses to social protection regulations enacted by government to insure the wellbeing and security of employees. By utilizing firm specific data collected from Shanghai we explore the relationship between firm characteristics, employer behaviour, and the effectiveness of compliance mechanisms that have been adopted to contain contribution evasion on the part of employers. We offer empirical evidence about the impact of the size of the firm, ownership structure, and incidence of risk on employer evasion behaviour in social protection payments. These results should not only enable enforcement agencies to improve compliance levels, but also contribute to the theory-building of the significance of social policies to employers and the impact of social protection on human resource policy.