Working Paper No. 924

Labor Market Conditions and Social Insurance in China

Published: September 5, 2012Pages: 32Keywords: Social insurance, Employer participation, Labor market tightness, People’s Republic of ChinaJEL-codes: J64; J65; D21
Published version

Labor Market Conditions and Social Insurance in China Johanna Rickne


Fifteen years after the introduction of highly ambitious social insurance programs for urban Chinese workers, a large number of them remain un-insured. This paper examines the relationship between labor market conditions and social insurance participation among industrial firms in the pre-crisis years of 2000–2007. I find that increased labor tightness over this period was a quantitatively important driver of participation. Comparing different segments of the labor market, stronger response to tightness is found in sectors with the largest shares of un-insured: private firms, those with a larger share of low-educated workers, and those without labor unions. Increased tightness in the years ahead can therefore be expected to aid policy makers in social insurance implementation and in combating insurance inequality.

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