The Social Benefit System in Urban China: Reforms and Trends from 1988 to 2002

Abstract

This article systematically reviews the macrolevel social policy changes in urban China during recent years. It also provides empirical evidence on how such policy changes reflect on microlevel family benefit levels from 1988 to 2002 using the national China Household Income Project data. The social policy reform process gradually shifted away from welfare provision through work units to greater emphasis on individual taxes and contributions. The government has also taken a more active role in providing a safety net for the urban poor. Empirical results show that even though the real value of social benefits increased over time, its increasing pace was laggard by that of market earnings, yielding a smaller share in final household income since the reforms. Pensions, public assistance, health, and education benefits increased during the period, while housing, food assistance, and supplementary income decreased.