Extension of social insurance coverage to informal economy workers in China: An administrative and institutional perspective

Authors:
Jiwei Qian
Zhuoyi Wen

Issue:
Volume 74 (2021), Issue 1

Link to full article:
https://doi.org/10.1111/issr.12258

This article reviews administrative issues in the context of decentralized social protection in China. In particular, what are the main obstacles for expanding social insurance coverage for workers in the informal economy? Over the last two decades, China has achieved remarkable progress towards universal social protection when this target was set as a national policy priority. However, the social insurance enrolment of informal economy workers still lags significantly behind. This article reviews the application of the International Labour Organization’s definition of informality in the Chinese context and overviews existing pension and health insurances in China. This article discusses the impact of China’s inter-governmental fiscal relations and decentralized social protection in the multilevel government system. The article highlights that under a system of decentralized managed social insurance many informal sector workers choose to opt out of the system because of low benefits and high compliance costs. This result in deficits in social insurance coverage amongst informal economy workers.

Topics:
Extension of coverage
Keywords:
social insurance
informal workers
informal employment
coverage
Countries:
China