Social Insurance Coverage in Urban China. John Giles Dewen Wang

Size: px

Start display at page:

Download "Social Insurance Coverage in Urban China. John Giles Dewen Wang"

Clement Doyle
8 years ago
Views:

1 Social Insurance Coverage in Urban China John Giles Dewen Wang

2 Overview Social insurance schemes in Urban China Trends in social insurance coverage Regional variation Micro evidence of social insurance coverage Understanding patterns from different data sources Issues involved in expanding coverage Conclusion

of social insurance coverage Understanding patterns from

3 Motivation Policy goals Extending social insurance coverage is an important current policy priority of the Chinese government A 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

challenges remain when extending social insurance schemes to informal sectors and informal employees.

4 Social Insurance Schemes in Urban China Schemes 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

percent of payroll 2 percent of monthly wage Work injury insurance Average about 1 percent of payroll No employee contribution

5 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

M Other enterprises M M M Public institutions M/PAGO M M Government agencies PAGO M Social organizations PAGO M

6 Pension Insurance Coverage Coverage Rate of Pension Insurance (%) Definition One Definition Two

1992 1993 1994 1995 1996 1997 1998 1999 2000 2001

7 Medical Insurance Coverage Coverage rates of medical insurance (%) Definition one Definition two

1994 1995 1996 1997 1998 1999 2000 2001 2002

8 Urban Resident Basic Medical Insurance Scheme Number (million) Coverage rate (%) Number of urban residents participated in basic medical insurance (million) Coverage rate (%) 10

2008 2009 70 60 50 40 30 20 Number of urban residents

9 Rural Migrant Workers in Urban Social Insurance Schemes (%) Year Pension Insurance Medical insurance Unemployment Insurance

insurance Unemployment Insurance 2006 15.0 25.

10 Regional Coverage Variation-by Scheme PI (%) UI (%) MI (%)

60 80 100 120 MI (%) 2000 2002 2004 2006 2008

11 Regional Coverage Variation-by Per Capita GDP in Logarithm Form PI (%) UI (%) MI (%) log (Per Capita GDP) log (Per Capita GDP) log (Per Capita GDP)

(%) 20 40 60 80 100 120 MI (%) 8 9 10 11 log (Per Capita

12 Micro Evidence Who 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.

Gender differences are not obvious among those employed in firms.

13 In 2005 Low Participation in Pension Programs by Migrants Populations and Gender Differences CULS 2005

14 Expanded Participation by Migrants as of 2010, but Gap is Still Significant CULS 2010

15 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.

Working age population, age 16-60, includes many women who have retired as early as 50

16 Social Insurance Support Received Among Locals Out of Work

17 Social Insurance Received by Out of Work Migrants

18 Early Retirement of Urban Women Allows for Much More Pension Support of Women Out of Work Share of Non-Working with Support Local Men Share Year Pension UI

of Non-Working with Support Local Men Share 0.2.

19 Declining Replacement Rates of Pension Benefits in Urban China Replacement rates (%) Enterprise Employees PSU+GOV

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001

20 Over the Crisis Period, Some Decline in Share of Urban Residents Registered as Unemployed Who Receive Benefits

21 UI Benefits Have Kept Rising, But the Replacement of Average Wage Has Declined UI benefit level (Yuan/Year) Proportion of average wage (%) UI benefit level Proportion of avarage wage

22 Roadmap toward A Full Coverage Institutional reform Scaling-up urban resident medical insurance scheme to cover all urban residents Piloting and rolling out urban resident pension scheme to cover all urban residents Reforming urban employee pension scheme and encouraging rural migrants 'participation Extending UI to rural migrant workers Pooling and integration of MIS and service delivery Implementation and enforcement of labor contract law and labor promotion law Supporting reform measures Hukou reform, fiscal system reform and statistical reform

23 Conclusions Considerable 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 selfemployed and those in small scale enterprises Understand compliance among employers and employees alike

24 Approach to China-India Comparison Start 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.

Pension schemes are integral parts of China s social protection system

Dewen Wang World Bank March 26-27, 2014, Incheon, Republic of Korea Pension schemes are integral parts of China s social protection system SP programs Social Insurance Social Assistance Social Welfare