Social Security Policy in the Context of Evolving Employment Policy

Abstract

This chapter is concerned with three transitions and their effects on social security and employment policies. In the transition from Maoist socialism, China aimed to reduce worker redundancy in enterprises and also to reduce the cost of benefits such as pensions that state-owned enterprises had to pay for their workers, whose jobs were guaranteed for life. The chapter traces the reforms in social security and employment policies and concerns over unemployment and possible risks to social stability. Employment policy was driven by the unresolved tension between reducing redundancy and preserving stability, while early pension reforms accommodated the evolving employment policy. As officials became aware of aging and the demographic transition, pension policy began to develop more independently, although employment concerns still kept the retirement age low. Evidence is presented that work has become common among older people in spite of official policy. Finally, the transition from agriculture has resulted in masses of rural people finding urban employment. In 2009 a rural pension system was established, separate from the urban system. But continued movement of workers between sectors is likely to create tensions in this dual pension system.