An analytical approach to examine the influence of innate endowment, human capital and social insurance difference on decision-making of labor force

Abstract

This paper introduces the reputation model of information economics and constructs a mathematical model containing innate endowment, human capital, social insurance difference which vividly portrays decision-making of labor force with different innate endowment and human capital in two different social insurance systems of Beijing and Hebei province. The results showed that labors with high ability and high human capital will choose to work in Hebei province if the synergy of social insurance systems among Beijing, Tianjin and Hebei province can not keep up with the integration process of Beijing, Tianjin and Hebei province which does not match the goal of Beijing as the center of innovation and technology in China in the future. On the contrary, if the “siphon effect” of Beijing on the human resources in Hebei area has not been effectively alleviated, it will inevitably increase the payment pressure of the Hebei social insurance fund. Therefore, in the process of integration of Beijing, Tianjin and Hebei province, the three governments must increase the overall use of social insurance funds of Beijing, Tianjin and Hebei province as well as accelerate the synergy of social insurance systems of Beijing, Tianjin and Hebei province.

Keywords:

• The integration strategy of Beijing
• Tianjin and Hebei province
• Innate endowment
• Human capita
• Synergy of social insurance system