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A Theory of Multi-Transitions and the Chinese Welfare State

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A Theory of Multi-Transitions and the Chinese Welfare State University of Tennessee, Knoxville TRACE: Tennessee Research and Creative Exchange Doctoral Dissertations Graduate School 12-2007 A Theory of Multi-Transitions and the Chinese Welfare State Bo Li University of Tennessee - Knoxville Follow this and additional works at: https://trace.tennessee.edu/utk_graddiss Part of the Political Science Commons Recommended Citation Li, Bo, "A Theory of Multi-Transitions and the Chinese Welfare State. " PhD diss., University of Tennessee, 2007. https://trace.tennessee.edu/utk_graddiss/223 This Dissertation is brought to you for free and open access by the Graduate School at TRACE: Tennessee Research and Creative Exchange. It has been accepted for inclusion in Doctoral Dissertations by an authorized administrator of TRACE: Tennessee Research and Creative Exchange. For more information, please contact [email protected]. To the Graduate Council: I am submitting herewith a dissertation written by Bo Li entitled "A Theory of Multi-Transitions and the Chinese Welfare State." I have examined the final electronic copy of this dissertation for form and content and recommend that it be accepted in partial fulfillment of the equirr ements for the degree of Doctor of Philosophy, with a major in Political Science. Yang Zhong, Major Professor We have read this dissertation and recommend its acceptance: David L. Feldman, Ian Down, Mary Rogge Accepted for the Council: Carolyn R. Hodges Vice Provost and Dean of the Graduate School (Original signatures are on file with official studentecor r ds.) To the Graduate Council: I am submitting herewith a dissertation written by Bo Li entitled "A Theory of Multi- Transitions and the Chinese Welfare State." I have examined the final electronic copy of this dissertation for form and content and recommend that it be accepted in partial fulfillment of the requirements for the degree of Doctor of Philosophy, with a major in Political Science. Yang Zhong, Major Professor We have read this dissertation and recommend its acceptance: David L. Feldman Ian Down Mary Rogge Accepted for the Council: Carolyn R. Hodges Vice Provost and Dean of the Graduate School (Original signatures are on file with official student records.) A Theory of Multi-Transitions and the Chinese Welfare State A Dissertation Presented for the Doctor of Philosophy Degree The University of Tennessee, Knoxville Bo Li December, 2007 Copyright © 2007 by Bo Li All rights reserved iii DEDICATION This dissertation is dedicated to my wife Jing Shen for supporting me all the time. iv ACKNOWLEDGEMENTS This dissertation has benefited immeasurably from the assistance and support of many people. First and foremost, I am grateful to Professor Yang Zhong, the chairperson of my doctoral dissertation committee. Special thanks go to Professors David L. Feldman, Ian Down, Mary E. Rogge for commenting on the proposal and the final draft. Finally, I am grateful to my friend Grant Gilreath for reviewing this dissertation. v ABSTRACT In this dissertation I introduce an institutional approach for the research of the Chinese welfare state and the measure of people’s welfare benefit. I demonstrate that multiple institutional transitions due to the economic reforms initiated in the early 1980s have since dramatically changed the Chinese welfare state and the way welfare benefits are distributed. Multiple institutional transitions discussed in this dissertation are structural changes associated with the state-owned enterprise (SOE) reforms, the rapid industrialization, ever-growing urbanization, and large-scale decentralization of the fiscal system. Through the exploration of the data from the 1988 and 1995 Chinese Household Income Project (CHIP), I found that SOE reforms and the fiscal decentralization played a significant role in the cutback of welfare benefit in the reform era. Employees in non- state sectors and drawing welfare benefits from local welfare funds are more likely to receive less welfare benefits from the state or the work unit than those people employed in the state sector and drawing welfare benefits from state funds. The other two institutional changes, namely industrialization and urbanization, are not statistically significant. vi TABLE OF CONTENTS CHAPTER 1: Introduction................................................................................................ 1 1. China’s Multiple Transitions and Welfare.................................................................. 2 2. The Research Purposes and Possible Findings ........................................................... 6 3. Research Methods and Data Sources........................................................................ 10 4. Chapter Outlines ....................................................................................................... 13 CHAPTER 2: The Welfare State and Welfare State Theories........................................ 16 1. Western Welfare State Theories ............................................................................... 16 2. The Chinese Welfare State: Traditional and Modern Perspectives .......................... 21 3. The Role of the State in Welfare State Studies......................................................... 26 4. The Active Role of the Chinese State in Welfare State Studies ............................... 31 5. Conclusion ................................................................................................................ 35 CHAPTER 3: The Chinese Welfare State in Transition ................................................. 37 1. A Transition Society ................................................................................................. 37 1.1 The Communist Takeover................................................................................... 40 1.2 The Overpopulation Challenge........................................................................... 40 2. Traditional Welfare in China .................................................................................... 44 3. Welfare Policies after 1949....................................................................................... 49 3.1 Social Security ................................................................................................... 49 3.2 Social Welfare and Relief ................................................................................... 53 3.3. Health Insurances and Services ......................................................................... 54 4. Welfare Programs in the Reform Era........................................................................ 55 4.1 The Labor Contract System and Urban Laid-offs............................................... 58 4.2 Reforms in the Welfare System .......................................................................... 61 4.2.1 The “Two Guarantees” and “Three Lines of Protection” ............................ 63 4.2.2 The Minimum Living Standard Security System ........................................ 65 4.2.3 The Old-Age Insurance System................................................................... 66 4.2.4 The Medical Insurance System.................................................................... 68 4.2.5 The Unemployment Insurance System ........................................................ 69 5. Conclusion ................................................................................................................ 70 CHAPTER 4: China’s Multiple Transitions and Welfare Spending: General and Specific Factors................................................................................................................. 73 1. The General Factors.................................................................................................. 74 1.1 The Economistic State Orientation ......................................................................... 74 1.2 The Social Impacts of Economic Reforms ......................................................... 80 1.2.1 Rural Reforms and the Collapse of the RCMS........................................... 83 1.2.2 Urban Reforms and the Social Security and Welfare .................................. 87 1.2.3 Institutional Decentralization and the Rise of Private Businesses............... 95 2. The Specific Factors ................................................................................................. 99 2.1 Industrialization ................................................................................................ 101 2.2 SOE reforms...................................................................................................... 107 vii 2.3 Urbanization...................................................................................................... 110 2.4 Decentralization ................................................................................................ 114 3. Conclusion .............................................................................................................. 124 CHAPTER 5: Institutional Changes and Welfare Benefits: Hypotheses and Evidences ........................................................................................................................ 126 1. Data......................................................................................................................... 127 2. Descriptive Analyses .............................................................................................. 129 2.1 Falling Welfare Coverage................................................................................
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