Economic Implications of Providing Social Security for Gig Workers in China

Abstract

Chinas gig economy, with over 200 million workers, plays a vital role in providing flexible employment but faces significant social
protection gaps. Unlike traditional employees, gig workers rarely have access to pensions, health insurance, or work injury coverage, leaving
them vulnerable to income volatility and occupational risks. This study investigates the economic implications of providing social security to
gig workers in China. Using a labor supply framework and a Keynesian consumption-multiplier model, we estimate the potential effects on labor market participation, aggregate consumption, and economic growth. Results suggest that social security coverage can enhance workforce
stability, reduce poverty risks, and generate substantial macroeconomic benefits through increased consumption. However, the policy poses
challenges for employers, as rising labor costs may reduce hiring or encourage informal contracts. The study argues for phased implementation and shared contributions among workers, employers, and government to mitigate cost pressures while achieving long-term economic and
social gains.