The Divided Chinese Welfare System: Do Health and Education Change the Picture?

Abstract

Using the China Household Income Project 2007 data and imputing health and education benefits through microsimulation, this article provides evidence on how the inclusion of health and education benefits might change the estimated size, structure and redistributive effects of the Chinese social welfare system. We find that the inequalities in social welfare systems across the urban–rural–migrant populations persisted, reinforcing the multidimensional inequalities in health and education well documented in the literature. Imputed health benefits were larger and played a greater redistributive role in urban areas than for their rural and migrant peers. Imputed education benefits, on the other hand, played a more equalising role in rural and migrant populations as compared to the urban population. These results highlight the importance for China to use health and education benefits effectively to mitigate such multidimensional inequalities and enhance the life opportunities of disadvantaged citizens, especially children.