Social Policy Reforms and Economic Distances in China

Abstract

Using CHIP data for 2002, 2007, and 2013, this chapter examines the effects of social policy reforms on the economic distance between rich and poor households in the urban, rural, and migrant sectors. In the urban sector, pensions consistently narrowed economic distances, whereas other social benefits—health insurance, social assistance, supplementary income, and in-kind benefits—had little redistributive impact. Social benefits in both the rural and migrant sectors changed from being regressive in 2002 to becoming progressive in 2013. In the rural areas, benefits in 2013 from agricultural and livelihood subsidies played the most significant redistributive role; private transfers also narrowed economic distances. Among migrants in 2013, health benefits and taxes and fees narrowed economic distances, although less so than among rural residents. Despite the expansion of social policies during this period, in both urban and rural China market forces trumped the redistributive effects of the social benefits.