Social insurance for migrant workers in China: impact of the 2008 Labour Contract Law

Abstract

Using the China Household Income Project (CHIP) 2007, 2008, and 2009 longitudinal migrant survey data, this article provides new evidence on the effects of China’s 2008 Labour Contract Law (LCL) on migrant workers’ social insurance participation, including in pensions, work injury insurance, unemployment insurance, medical insurance, and the housing provident fund. We find consistently strong evidence that migrant workers’ labour contract status was significantly associated with their participation in all five types of social insurance. In particular, having or gaining a long-term contract helped promote migrant workers’ social insurance participation, while losing one such contract decreased their chance of social insurance participation. Using a difference-in-differences (DID) method and focussing on the panel sample, we find that the implementation of the LCL helped boost migrant workers’ chance of social insurance participation consistently and significantly, especially for those who gained a long-term contract. These findings suggest that the LCL at least partly reached its intended policy goal of improving social protection for migrant workers, a disadvantaged group in the Chinese labour market. Future research should use longitudinal data and rigorous methods to track the long-term impact of this important law and help build a strong, unified social insurance system for all Chinese citizens.