Compulsory Social Security Participation Revealed Preferences
The study starts with a classification of the enterprises depending on their participation to the Vietnam social security. Among the enterprises that contribute, one striking feature is that on average the share in the wage bill of the contribution...
| Main Authors: | , |
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| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2017
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/102091468139775681/Compulsory-social-security-participation-revealed-preferences http://hdl.handle.net/10986/28098 |
| Summary: | The study starts with a classification
of the enterprises depending on their participation to the
Vietnam social security. Among the enterprises that
contribute, one striking feature is that on average the
share in the wage bill of the contributions paid to the
Vietnam social security is much lower than the contribution
rate established in the law. Even if the enterprises that do
not register their employees are excluded from the
calculation, the average ratio is of 7.6 percent while the
legal rate was in 2006 equal to 23 percent. The study,
consequently, examine this issue before investigating the
characteristics of the enterprises that do not register
their employees. The paper shows that this low ratio is due
to a wide practice by enterprises of paying contributions on
lower wages than current wages. The paper investigates,
furthermore, who benefit from the practice of avoiding
registration and from the practice of under-reporting wages
to social security. The results indicate strong evidence
that employees in enterprises that are not registered to
social security and in enterprises that under report wage
receive higher net wages. |
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