Dual Pension Regimes in China
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Politics of Inclusion and Exclusion : Dual Pension Regimes in China by Yujeong Yang A dissertation submitted in partial fulfillment of the requirements for the degree of Doctor of Philosophy (Political Science) in The University of Michigan 2018 Doctoral Committee: Professor Mary E. Gallagher, Chair Associate Professor Yuen Yuen Ang Associate Professor Lan Deng Professor Allen D. Hicken Yujeong Yang [email protected] ORCID iD: 0000-0003-4193-42672018 Copyright c Yujeong Yang To my family ii Acknowledgements I have received enormous support and opportunities throughout my journey to com- plete this dissertation. Most of all, I would like to thank my doctoral committee mem- bers. Each member of my dissertation committees has provided me with invaluable support and guidance that helped me complete this dissertation, improve the quality of my research, and prepare my future as a scholar. It has been a great pleasure and privilege for me to work with such an amazing group of scholars. First, I thank my advisor, Mary Gallagher, for her numerous support and encourage- ment. She has been an amazing mentor from the very beginning of this journey. She has spent countless hours in reading my coarse drafts, helping me make my arguments more rigorous, and encouraging me to further develop my research idea. She has come to every single presentation I made during workshops and conferences and given me thorough comments. She has also provided me with opportunities to work with her on exciting research project and to publish the works as co-author. There are many mem- orable moments that made me think I am lucky to have her as my advisor, but one moment I can never forget is when I met her in Shanghai in the winter of 2015. At that time, I was doing my fieldwork in Shanghai, struggling with the loneliness, anxiety, and frustration. She kindly accompanied me on her trip to a conference held in Beijing so that I could network with informants who can enrich my research. During the five-hour express train ride from Shanghai to Beijing, Mary and I had a long conversation about my fieldwork experience, research agenda, and future plan. The thoughtful advice, in- spiration, and support I received from her on the train were the keys that helped me overcome the difficulties I had during my fieldwork and eventually made me fully enjoy the fieldwork experience and my academic journey as a whole. I can confidently say that I am lucky to have an amazing academic advisor and a role model like her. I am also grateful to other members of my dissertation committee. Allen D. Hicken has read and commented on several versions of my papers. He has also helped me think iii about ways to re-frame my research project so that I can target a broader audience and reach beyond the China specialists. He has also provided me with invaluable career advice. Yuen Yuen Ang has witnessed every step of my progress in graduate school as a researcher and as a teacher. As I worked with her as her research assistant and teaching assistant, I could learn how to conduct research, how to collect and manage data, and how to communicate with students. When I was preparing my job market materials, she pushed me to think about ways to pose my question in a more interesting and appealing way. Lan Deng joined the committee from the College of Urban Planning and provided me new perspectives on my dissertation. Her suggestions, encouragement, and questions made me think about alternative explanations. The long journey to complete my Ph.D. was only possible with the support of amaz- ing colleagues and fellow graduate students. When I first came into the program, Qingjie Zeng was one of the few graduate students interested in Chinese politics. Qingjie shige has been a wonderful colleague with whom I discuss research idea and collaborate on research projects. I also benefited from the friendly intellectual community at the Univer- sity of Michigan. Patricia Chen, Yilang Feng, Yuequan Guo, Maiko Heller, Jeffrey Javed, Blake Miller, Mike Thompson, Nicole Wu, and Alon Yakter have provided me with help- ful comments and suggestions for my dissertation and job market papers and have also patiently listened to my presentations for multiple times. I also owe special thanks to Adrian Shin for giving me helpful feedback for my papers, revising my drafts, providing me with invaluable tips, and listening to my concerns. He is the first one I would talk to whenever I have any concerns or questions and I thank him for enduring my endless questions. I am also deeply grateful to the Lieberthal-Rogel Center for Chinese Studies, Department of Political Science at the University of Michigan, and Rackham Graduate School of University of Michigan for supporting my doctoral research. In China, my interviews were arranged by Sun Zhongwei, Song Jing, Wang Meiyan, and Chen Wei. My fieldwork would have not been productive and enjoyable without their help and support. Yan Yu and Wang Zilong welcomed me wholeheartedly when- ever I visited China and treated me with best local food over the years. I also would like to thank my best friends: Juhyun Song and Jeongeun Kim. They helped me settle in when I first came to Ann Arbor with two suitcases in 2011. They have been great mentors, soul mates, sisters, and study partners since then. I deeply thank Yeonkyung Jeong who’ve always wished my best and provided me with thoughtful academic and non-academic advice. I am also grateful to Yongjoo Park for reading my iv papers, listening to my presentations, providing me with harsh yet helpful comments, and making me laugh when I feel overwhelmed and weary. Finally and above all, I thank my family for their support and sacrifice. I am indebted to my parents, Seungcheon Yang and Hyunsook Choi, and my brother, Sunmo Yang. In my third year in the program, my mother was diagnosed with Lupus and underwent two surgeries. I can only imagine what my family would have gone through during that difficult time. Even then, my family has always given me full support so that I can concentrate on my work. Their support and sacrifice make everything possible. This dissertation is dedicated to them. v Contents Dedication ........................................... ii Acknowledgements ..................................... iii List of Figures ......................................... x List of Tables ......................................... xii List of Abbreviations .................................... xiv Abstract ............................................ xv Chapter 1 Introduction ........................................ 1 1.1 Puzzle......................................... 8 1.2 A Sub-national Approach ............................. 11 1.3 Pension Programs in China ............................ 13 1.4 Main Arguments .................................. 15 1.5 Organization of the Dissertation ......................... 19 2 Theory ........................................... 22 2.1 Introduction..................................... 22 2.2 Theories of Social Policies ............................. 25 2.2.1 Structural Explanation........................... 25 2.2.2 Social-Pressure Based Explanation: Power Resource Theory & Cross- Class Coalition Theory........................... 28 2.2.3 State-Centric Explanation ......................... 31 vi 2.2.4 Summary................................... 34 2.3 Authoritarian Welfare Provision: Who Distributes Welfare Benefits and Why?......................................... 35 2.3.1 Authoritarian Incentives for Welfare Provision............. 35 2.3.2 The Chinese State: Fragmented Political Structure and Diverging Welfare Preferences............................. 38 2.3.3 Summary................................... 40 2.4 Whom to Benefit?.................................. 41 2.4.1 Coopting the Privileged: Collusive Welfare Provision Strategy . 43 2.4.2 Embracing the Underprivileged: Broader yet Modest Welfare Pro- vision..................................... 45 2.4.3 Theoretical Framework: Politics of Welfare Inclusion and Exclusion 47 2.5 Understanding Chinese Local Welfare States .................. 50 2.6 Conclusion...................................... 56 3 How the Central-Local Relationship Shaped the Chinese Pension System ... 60 3.1 Introduction..................................... 60 3.2 Evolution of the Chinese Pension System: Central and Local Government’s Responses to Major Structural Changes ..................... 62 3.2.1 The 1990s: From SOE-based Pension System to Locally Managed Pension System............................... 63 3.2.2 The 2000s: Marketization, Growing Labor Mobility, and Further Fragmentation of the Pension System.................. 68 3.2.3 The 2010s: A Bumpy Road toward the Universal Pension System . 74 3.3 Current Pension System: Consolidation of the Dual Pension Regime with Local Fragmentation ................................ 78 3.3.1 Employment-Based Pension Program .................. 79 3.3.2 Residency-Based Pension Program.................... 85 3.4 Institutional Background behind the Fragmentation of the Chinese Pen- sion System ..................................... 92 3.4.1 Fiscal Incentives .............................. 94 3.4.2 Local Welfare Chauvinism and Local Citizenship Institutions . 97 3.4.3 Economic Incentives: Employer Interests and Local Economic De- velopment..................................100 3.5 Concluding Remarks................................102 vii 4 Creating “Outsiders” : How Labor Informalization and Labor Mobility In- teract in Stratifying Chinese Workers .......................