Overview Social insurance schemes in Urban ChinaTrends in social insurance coverageRegional variationMicro evidence of social insurance coverageUnderstanding patterns from different data sourcesIssues involved in expanding coverageConclusion
Motivation
Policy goals Extending social insurance coverage is an important current policy priority of the Chinese governmentA full coverage goal is set to provide basic social security to cover all people by 2020
But, challenges remain when extending social insurance schemes to informal sectors and informal employees….Document patterns in social insurance coverage, and as the work progresses, and aim to explain both provision and take up of insurance
Social Insurance Schemes in Urban ChinaSchemes Employer Contribution Employee Contribution
Pension insurance <= 20 percent of payroll <=8 percent of monthly wage
Unemployment insurance 2 percent of payroll 1 percent of monthly wage
Medical insurance 6 percent of payroll 2 percent of monthly wage
Work injury insurance Average about 1 percent of payroll No employee contribution
Maternity insurance Not more than 1 percent of payroll No employee contribution
Total 30 percent of payroll 13 percent of monthly wage
Recipients of Social Insurance Schemes Registration/Workers Pension Unemployment insurance Medical Insurance
Urban enterprises SOEs M M M Collective M M M Foreign and SAR funded enterprises M M M Private enterprises M M M Other enterprises M M M
Public institutions M/PAGO M M
Government agencies PAGO M
Social organizations PAGO M
Private non‐enterprise units V V
Self‐employed V V
Flexible urban employment workers V V
Rural migrant workers V O V
Pension Insurance Coverage
20
30
40
50
60
70
8019
90
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
Coverage
Rate of Pen
sion Insurance (%
)
Definition One Definition Two
Medical Insurance Coverage
0
10
20
30
40
50
6019
93
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
Coverage
rates of m
edical in
surance (%
)
Definition one Definition two
Urban Resident Basic Medical Insurance Scheme
10
20
30
40
50
60
70
40
60
80
100
120
140
160
180
200
2007 2008 2009
Num
ber of urban
residen
ts participated
in basic med
ical in
surance (m
illion)
Number (million) Coverage rate (%)
Coverage
rate(%
)
Rural Migrant Workers in Urban Social Insurance Schemes (%)
Year Pension Insurance Medical insurance Unemployment Insurance
2006 15.0 25.0
2007 17.6 29.8 11.0
2008 18.0 31.8 11.6
2009 18.7 30.6 11.6
Regional Coverage Variation-by Scheme40
6080
100
120
2000 2002 2004 2006 2008
P I (%)
4060
8010
0
2000 2002 2004 2006 2008
U I (% )
2040
6080
100
120
2000 2002 2004 2006 2008
M I (% )
Regional Coverage Variation-by Per Capita GDP in Logarithm Form
4060
8010
012
0
8 9 10 11log (Per Capita GDP)
PI (%)
4060
8010
0
8 9 10 11log (Per Capita GDP)
UI (%)
2040
6080
100
120
8 9 10 11log (Per Capita GDP)
MI (%)
Micro EvidenceWho is currently excluded?
How does participation vary by age, gender, educational attainment and migrant status?
Gender differences are not obvious among those employed in firms.As one might expect, there is less gap between migrants and urban residents at higher levels of educational attainment.Not surprisingly follows patterns of informal employment.
In 2005 Low Participation in Pension Programs by Migrants Populations and Gender Differences
CULS 2005
What Actual Support is Received by Those who are Out of Work?
We do not separate those who are unemployed from out of the labor force.
Working age population, age 16-60, includes many women who have retired as early as 50 and are collecting pensions.
UI receipt is more important for men, as women tend to exit from the labor force at a younger age.
Early Retirement of Urban Women Allows for Much More Pension Support of Women Out of Work
0.2
.4.6
.8S
hare
2006 2007 2008 2009 2010Year
Pension UI
Local MenShare of Non-Working with Support
Declining Replacement Rates of Pension Benefits in Urban China
40
50
60
70
80
90
100
11019
90
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
Replacem
ent rates (%
)
Enterprise Employees PSU+GOV
Over the Crisis Period, Some Decline in Share of Urban Residents Registered as Unemployed Who Receive Benefits
UI Benefits Have Kept Rising, But the Replacement of Average Wage Has Declined
0
5
10
15
20
25
30
0
1000
2000
3000
4000
5000
600019
94
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
UI ben
efit level
UI benefit level (Yuan/Year)
Proportion of average wage (%)
Prop
ortio
n of av
aragewage
Roadmap toward A Full CoverageInstitutional reform
Scaling-up urban resident medical insurance scheme to cover all urban residentsPiloting and rolling out urban resident pension scheme to cover all urban residentsReforming urban employee pension scheme and encouraging rural migrants 'participationExtending UI to rural migrant workers
Pooling and integration of MIS and service deliveryImplementation and enforcement of labor contract law and labor promotion lawSupporting reform measures
Hukou reform, fiscal system reform and statistical reform
ConclusionsConsiderable Progress in Raising Coverage Rates for Pensions and Health Insurance for the Urban Population
Support Actually Received by Migrants Out of Work is Still Quite Low.
To Expand further Social Insurance Coverage in Urban Areas: We need to understand voluntary take-up decision of self-employed and those in small scale enterprisesUnderstand compliance among employers and employees alike
Approach to China-India ComparisonStart with mapping out the similarities and differences in
arrangements for social protection programs for public
and formal sector employees in China and India
Highlight differences and similarities in approaches to
covering “informal sector” and “informal workers”
Describe and compare patterns of patterns of
participations by different groups of workers, and
patterns of benefit receipt.