Mandated Benefit and Their Impact in the Labor Market
Mandated benefit refers to additional entitlement by the employee beyond salary or wage. According to Baker and Stanger (1999), mandated employee benefits legislation is a basic prerequisite for small and medium enterprise but-not big corporations. There are various categories of mandated benefits. They include contributions to Medicare and social security, Unemployment compensation and Compensation insurance.
In addition, mandated benefit programs are more efficient but less equitable than standard public programs. The existence of mandated benefits and government funded programs arise from government paternalism, the existence of externalities, and adverse selection effects on firm survival if only some firms provide ...