Social assistance in Shanghai: Dynamics between social protection and informal employment

China's social assistance programme (dibao 低保) was introduced in Shanghai in 1993 and gradually extended to cover all urban areas by 1998. Due to massive economic restructuring, starting in the early 1990s, many urban dibao recipients were laid‐off, that is, state‐owned enterprise (SOE) employees. Shanghai was the epicentre of SOE reform, and the dibao system was primarily introduced to provide a safety net for laid‐off workers. In 2010, approximately 3 per cent of urban, permanent residents were on dibao, and 72 per cent of its recipients were working‐age adults. We conducted longitudinal qualitative interviews five times over 2 years with 40 dibao families that contained adults of working age in a Shanghai district. The current study demonstrates how they managed their employment, income and the dibao system. Findings suggested that, for various reasons, there was insufficient motivation for recipients to gain reemployment and leave dibao. Furthermore, local cadres, which were responsible for assessing and recommending dibao applicants to the district government, likely just assumed the incomes of adults with working capabilities.