Social assistance in Shanghai: dynamics between social protection and non-formal employment

Abstract

The social assistance programme of China (dibao) or Minimum Living Standard Guarantee System (MLSG) was introduced in urban China since 1993 in Shanghai and was gradually extended to cover all Chinese urban areas in 1998. Since 2007, the system basically covered all rural areas as well. In 2009, there was 70.9 million persons (58.4 million in 2007) benefiting from di bao, or 5.3% (4.4% in 2007) of the total population. This comprised of 3.8% (the same in 2007) of the urban population and 6.7% (4.9% in 2007) of the rural population respectively. The total expenditure was about 0.24% of the GDP in 2009 (0.15% in 2007). By the end of 2007, older people constituted about 13.1%, and adults constituted 62.9% of the recipients all over China. Like many other countries, di bao is also a gateway to some essential social services, such as housing, health care, and education, which are still inadequately provided for many low-income households. Since informal employment is very common among low-income groups in China, the sources of income are difficult to establish. Given this background, dibao is treated as an additional source of income, and gateway to social services for low-income households working in the informal sector. The incentive and opportunities to leave dibao for low-income households is limited. Shanghai is one of the most affluent regions in China, 88.7% of its population were urban citizen in 2007. A lower percentage of its residents were on dibao (2.5% comparing to 4.4% of the national figure in 2007). However, 84% of its recipients were working age adults. We have conducted a longitudinal qualitative approach to study 40 dibao families with adults of working age in a district in Shanghai. We have interviewed twice over a period of 12 months to see how they manage their employment and income and negotiate with the dibao system. The findings provided insights into the dynamics and processes of how dibao has become a gateway to essential social services and income supplement for workers in the informal employment sector.