Mandated labor costs, wages and capital investments: Essays in Applied Microeconometrics

• Main Authors: Tobias Haepp, 侯杜比
• Other Authors: Ping-Lung Hsin
• Format: Others
• Language: en_US
• Published: 2015
• Online Access: http://ndltd.ncl.edu.tw/handle/60641061569535012815

博士 === 國立臺灣大學 === 國家發展研究所 === 103 === Chapter 2 In this chapter, we employ manpower utilization data to test the theory of equalizing differences for the most recent amendments to the labor insurance contribution rates in Taiwan. Our empirical research fills a gap in the literature by providing evidence on compensating wage differentials for the third major type of mandated benefits after contrasting evidence has been provided for the effects of health insurance and pension fund contribution rates in previous research. We thus employ manpower utilization survey data over the period from 2010 until 2012 and estimate several difference-in-differences models comparing the development of the gap between private and public sector wages to the one in our base year. Our results broadly confirm the theoretical prediction of the theory of equalizing differences by demonstrating that private sector wages in Taiwan have indeed decreased in response to the reforms. Chapter 3 In recent years, mandated benefits in Taiwan have increased significantly due to several policy reforms pertaining to social insurance and labor welfare. An important policy issue is the question whether the resulting increase in total labor costs has in turn caused a decrease in capital investments. This chapter therefore employs data from Taiwanese stock market companies over the period from 2002 to 2012 to analyze the effect of mandated benefits on fixed capital investments. In order to shed light on both short-term and longer term processes and to control for potential bias due to unmeasurable heterogeneity and endogeneity between mandated benefits and other forms of labor compensation, we estimate error-correction models using a GMM estimation strategy. The control variables employed are motivated by the literature on capital investments based on accelerator model, cash flow model, neoclassical model and Tobin''s Q. According to our empirical research results, an increase in mandated benefits causes a reduction in company capital investments. This finding is robust across different estimation techniques and various instruments employed to measure the development of mandated benefits. Chapter 4 This chapter empirically analyzes the impact of Chinese minimum wage regulations on the firm decision to invest in physical and human capital. We exploit the geographical and inter-temporal variations of county-level minimum wages in a large panel data set of Chinese firms covering the introduction of the new Chinese minimum wage regulations in 2004 and estimate dynamic panel data GMM models for our fixed capital investment regressions, as well as tobit models for our human capital investment regressions. In our basic regressions including all Chinese firms, we find significant negative effects of the minimum wage on human capital investment and significant positive effects on fixed capital investment. When grouping firms by their ownership structure, we find that all company groups - including state-owned and foreign-owned firms - have reduced their human capital investments, whereas only Chinese privately owned firms have increased their fixed capital investment rates, hence exhibiting a substitution effect between the two factors of production.