The outcome ultimately depends on wage flexibility in the demand and supply of work. Studies indicate that, in the long term, it doesn't matter whether fees are paid by employers or by workers. If insurance fees are transferred from employers to workers, the resulting pressure to increase wages can quickly nullify the momentary drop in employment costs. Incontrast, fees paid by workers and by those insured increase awareness of their own liability and make social insurance more transparent, thus perhaps having a positive impact on employment. If the aim is to improve employment substantially by means of cuts in social insurance fees, the cuts need to be sizeable.
Minor changes have little effect.
A less attractive feature of such gradation alternatives is that the fees payable by slightly larger companies would be considerably higher than at present. The fees payable by the very largest companies would rise only slightly and in some cases they might even fall. Cutting employers' social insurance fees, however, can be justified on the grounds that some of the fees are not directly linked with work. For instance, the higher national pension contribution paid by the employer, the smaller the national pension received by the wage-earner. Numbers of municipal social welfare and health care personnel took an upward turn in 1996, when municipalities and municipal federations employed a total of 215,900 professionals for such work.