More urban-rural integrated Chinese social welfare: How do education benefits improve the picture?

China has made remarkable progress in creating a more inclusive and shared social welfare system. Using data from the China Household Income Project (CHIP) 2013 and 2018, as well as data on financial expenditure on education, this paper found that the level of social welfare for Chinese residents increased significantly after considering implicit educational benefits. Driven by the national urban-rural integration strategy, incremental improvements in rural social security and the equalization of compulsory education across urban and rural areas progressively reduced income disparities in social benefits among urban, migrant, and rural groups. However, international comparisons reveal that Chinese government expenditures on social security and education remain slightly insufficient, limiting the potential redistributive effects of the welfare system. These findings highlight the urgency for China to increase social spending, better allocate welfare resources between urban and rural areas, and promote high-quality education.