Title:
INFLUENCE OF SOCIAL SECURITY CONTRIBUTION RATE IN EUROPEAN BANKING INDUSTRY

Authors:
Muneeb Ahmad , Abdul Rehman and Muhammad Nazir

Abstract:
The debate on the significance of the social security is as old as social security itself. The recent significance shrink between the cost and income of the social security is an alarming situation for all the stakeholders. The shrinking in social security surplus reduces the government and firm’s ability to rely on that surplus. This shortfall will lead to made up increased taxation, borrowings, or by reductions of social security contributions or combination of these alternatives. We analyzed the relationship of social security contribution and employment growth in the European banking over the time span of 2006 to 2015. We found the U shaped relationship, as increase in the social security contribution cost more to the banks which leads downsizing. Meanwhile social security payments boost the economy as the People who receive Social Security benefits are not saving that money for a rainy day. They pumped it back to the economy by purchasing goods and services. The businesses that receive that spending in the form of selling goods and services realize profits and hire more employees. This is what exactly we find the U shaped relationship for the European banking industry. So social security has multiplier effect on the economy, businesses and workers