Inequality of Pension Arrangements Among Different Segments of the Labor Force in China

Social security for older people in China today has been established institutionally. However, there are substantial problems such as coverage, affordability, fund management, and corruption. This paper aims to provide a general picture of China's social security system for older people and to argue that the inequality of pension arrangements among different segments of the labor force is one of the most conspicuous problems challenging the Chinese government. Four unequal aspects of the pension system concerning the financing resources and pension levels are examined in this paper: (1) unequal institutional arrangements among different sectors, (2) unbalanced governmental expenditure in pension provision, (3) an increasing gap in pension levels between urban and rural areas, and (4) uncovered groups such as the unemployed and self-employed. Historical, economic, and political reasons all contribute to this unequal institution under transition from socialism to a market-oriented economy. At present, it is urgent for the central government to take measures to integrate the various pension arrangements into the unified Old Age Insurance and to reduce the gaps among different regions.