Why are Migrants' Not Participating in Welfare ... - SAGE Journals

Why are Migrants’ Not Participating in Welfare Programs? Evidence from Shanghai, China* Yeqing Huang Tongji University

Zhiming Cheng University of Wollongong

In recent years, Chinese cities have attempted to extend urban welfare provisions to migrants, but migrants’ participation in such programs is relatively low. This paper examines migrant welfare participation in Shanghai and its association with personal characteristics, institutional factors, the labor market, attitudes about welfare programs and settlement intention. Except for hukou status, knowledge about policies and settlement intention, all the other factors help explain migrant nonparticipation in welfare programs. Comparing welfare participation among three subroups of migrants - the included, partially included and the transition group - explains the selection mechanisms for integrating migrants in welfare programs. Shanghai appears to be more welcoming of migrants who are female, with higher education, have better employment and greater trust in government impartiality.

* Yeqing Huang carried out this research under the School of Economics and Management, Tongji University. The authors thank the anonymous reviewers and editors of this journal for their constructive comments. This research was funded by the China National Social Science Fund –Youth Project ‘Welfare Attitudes of Migrants and Welfare Inequality in China’ (Project Number: 12CSH085) and Pujiang Talented Program (PJ [2012]0001374). The authors are solely responsible for the views expressed in this paper.

Asian and Pacific Migration Journal, Vol. 23, No. 2, 2014

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ASIAN AND PACIFIC MIGRATION JOURNAL

Introduction In the past three decades, China has witnessed a massive influx of internal migration from rural to urban areas. In 2012, China’s urbanization rate reached 53 percent; internal migrants were estimated to number 230 million (NBSC, 2013a). However, most rural-urban migrants reside only temporarily in the cities (Roberts, 2000; Wang and Zuo, 1999; Zhang, 2011). Most rural migrants do not have access to welfare services because most urban welfare services are provided only to those urban residents with a local hukou (household registration) (Cai, 2010a, 2010b). This limitation has resulted in welfare inequalities between urban residents and rural migrants in urban China (Lindbeck, 2008). In China, the Gini coefficient reached 0.49 in 2008 (NSBC, 2013b). Rising inequality has implications for social stability in China and has impelled the Chinese government to make the provision of urban welfare more equitable and accessible for the poor and disadvantaged (Gao et.al, 2012). More importantly, increased provision of welfare may help maintain China’s economic growth. It is predicted that the working age population will peak at one billion in 2015 and decline thereafter (Peng, 2011). The supply of cheap surplus labor from the rural areas has been one of the most important factors driving China’s economic growth but is no longer unlimited as a result of the diminishing population dividend (Cai, 2010c; Cai and Du, 2011; Wang, 2010). This development will lead to increased labor costs and potentially reduce China’s competitiveness in the global economy. One response to this potential labor shortage is to improve labor productivity by strengthening social protection and investment in human capital (Peng, 2011). Against this background, some local governments have extended their social insurance programs to cover migrants, although policies vary from locality to locality (Wang, 2008). However, rural migrants’ participation rates in these programs have been relatively low (Figure 1). One reason for the low participation rates is the poor portability of these programs between cities. In 2009, the central government promulgated interim measures on regional transfers of pension funds1 and medical funds2 to facilitate geographic mobility. However, these measures did not prevent

1 For details, see http://www.gov.cn/zwgk/2009-12/29/content_1499072.htm, accessed on 25 May 2014. 2 For details, see http://www.gov.cn/gzdt/2010-01/19/content_1513824.htm, accessed on 25 May 2014.

MIGRANTS’ PARTICIPATION IN WELFARE PROGRAMS

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FIGURE 1 Insurance Participation Rate among Rural-Urban Migrants, 2008-2012

30 25 20 15 10

2008

5

2009

0

2010 2011 2012

Source: NBSC (2013C)

a large number of migrant workers from withdrawing their contributions to these programs (CET, 2010). The low efficacy of welfare extension suggests that there is a puzzle in China’s welfare reform. Why are rural migrants reluctant to join urban welfare programs offered by the government? What are the factors associated with rural migrants’ participation in urban welfare programs? Previous literature on welfare reform for rural migrants mostly focuses on institutional barriers such as the rural-urban divide that has been created by the hukou system (Wu and Treiman, 2004; Chan and Buckingham, 2008; Fu and Ren, 2010). Researchers suggest (critically) that the attempt to extend welfare’s reach has not changed the dualist welfare system. For instance, the differences in the contribution and benefit rates between rural migrants and urban residents persist (Guan, 2007). The hukou system also makes welfare reform difficult because it is difficult for migrants to obtain local urban hukou (Chan and Buckingham, 2008). However, the rural-urban divide does not entirely answer certain questions, such as why some migrants participate in urban welfare programs while others with similar hukou status or similar eligibility do not? Focusing on the rural-urban divide also

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ignores the impact of welfare attitudes—how migrants perceive welfare programs that are meant for them—as the interests and motivations among individual migrants have begun to splinter in urban China. This paper contributes to the literature on welfare participation in three ways. First, it applies a comprehensive framework to study the factors associated with rural migrants’ welfare participation. Special attention is focused on migrants’ attitudes toward welfare programs. This dimension has rarely been discussed in previous literature. Second, this paper divides migrants into three subgroups—the excluded group, the partially included group and the included group—based on differences in participation in urban welfare programs and explores which factors contribute to explaining different participation choices. Third, Shanghai is selected as a case study because it is a primary destination for migrants and a pioneer in providing unified welfare programs for migrants and locals. In early 2000, the Shanghai municipal government began implementing a comprehensive insurance program4 which had been the major welfare program for nonlocal migrants (including both rural-urban and urban-urban migrants). Following this program, Shanghai began initiating welfare reforms in 2009 that have attempted to integrate migrants into local urban welfare programs by aiming to unify those policies that divided locals and migrants. Therefore, the participation of migrants in Shanghai programs might provide experiences and lessons for welfare reform in other cities. The following three sections review previous research on migrants’ participation in welfare programs in urban China, present the research methods, and report the findings with respect to the factors influencing participation in welfare programs and with respect to comparisons among the three subgroups (i.e., the excluded, the partially included and the included groups) regarding welfare participation. The final section concludes by highlighting major findings, policy implications and future research.

Literature Review Social exclusion is widely applied to examine welfare eligibility in western countries. Burchardt, Grand and Piachard (1999: 230) posit that “an individual is socially excluded if he or she is a geographical resident in a society, but for reasons beyond his or her control, he or she cannot participate in normal activities of citizens in that society.” “Participation” is an important means 4 Interim Procedures of Shanghai Municipality on The Comprehensive Insurance for Out-oftown Employees, availabe at http://www.for68.com/new/2007/1/li6759233833192170021320.htm, accessed on 25 May 2014. This policy was implemented separately for migrants, and its contribution and benefit rates were lower than those of local urban insurance programs.


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of distinguishing the “included” group from the “excluded” group (Silver, 1994). Welfare participation is an important indicator of how successfully immigrants perform in the host country (Drinkwater and Robinson, 2013) and also indicates whether immigrants are socially integrated into the host country. Immigrants who have acquired citizenship in their destination countries are mostly protected under those countries’ welfare systems. For immigrants of different statuses in their destination countries, the nature of their immigration and their entry categories strongly affect their eligibility in welfare programs. For instance, Sainsbury (2006) notes that welfare eligibility varies for permanent residents and those who had been admitted under family reunification and asylum. Several studies have been conducted to examine why some individuals in western countries are more willing to participate in welfare programs than others (Bassett et al., 1998; Li and Olivera, 2005; Borjas and Trejo, 1991; Davies, 1997). These studies found that certain personal characteristics, such as age, gender, education, marital status, and duration of stay contribute to explaining variations in welfare program participation. Prior studies on immigrants’ welfare participation draw a distinction between welfare eligibility and welfare claims (Currie, 2004; Hansen and Lofstrom, 2003; Castronova, et al., 2001). People who are eligible for welfare do not necessarily claim it. Some studies find that migrants are more likely to claim and receive welfare benefits than natives (Castronova, et al., 2001; Hansen and Lofstrom, 2003). Welfare claims are connected with economic cycles, the age of migrants and status in the labor market (Hu, 1998). When finding work in the labor market is difficult, the migrants are more likely to claim welfare. Attitudes about welfare, particularly opinions toward welfare policy at the group level (Gainous et al., 2008), also affect support for and willingness to participate in welfare programs. Attitudes toward inequality and the redistributive role of the government affect support for welfare policies and regimes in Europe (Jæger, 2006; Larsen, 2008; Swallfors, 1997). Comparative studies suggest that people in Scandinavian countries are more likely to support welfare programs than those in conservative or liberal countries (Swallfors, 1997). Hetherington (2005) finds that mistrust of government contributes directly to lack of support for social welfare programs in the US. He also proposes that declining public trust would likely make people less inclined to support welfare reforms initiated by the government—not because they oppose the initiatives but because they mistrust the “delivery system” or “they simply do not think the federal government is up to the task” (2005:5). Therefore, when welfare programs are not mandatory, people may be unwilling to participate just because they do not trust the government or have little confidence in welfare reforms initiated by the government.

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These factors listed above, which affect welfare participation in western countries, have also been examined in the context of China. In China, welfare eligibility is largely affected by institutional factors. The effects of the hukou system, which acts as a type of internal visa, have been widely discussed. Many migrants are excluded from equal access to urban welfare programs because of their lack of local urban hukou status. Because public resources and social welfare are distributed according to hukou status, Solinger (1999) described the situation as different types of citizenship within China; thus, the socioeconomic status of rural migrants in China is similar to that of illegal or undocumented immigrants in developed countries (Solinger, 1999; Roberts, 2000; Wu, 2010). Empirical studies also examine the influences of the hukou system on welfare participation in China, but arrive at different explanations for its impact. Some studies (Xu et. al., 2011) consider that the rural-urban dualistic welfare system persists because rural-urban migrants are less likely than urban-urban migrants to participate in welfare programs in the city. Using data collected in Jiangsu Province, Nielsen et al. (2005) found that migrants from within Jiangsu Province were more willing to participate in welfare programs than migrants from outside of the province. Nielsen and Smyth (2008) explained that local urban governments were more motivated by GDP growth, and they feared that if welfare were provided equally to rural migrants, increased labor costs would adversely impact economic growth. Another explanation is that the influence of the rural-urban hukou divide regarding insurance participation appears to be declining and that the local-nonlocal hukou divide better explains the variations in insurance participation among different hukou holders (Zhang et al., 2007; Cheng et al., 2014). This finding supports the position that differences between rural-urban migrants and urban-urban migrants in welfare participation are narrowing. Similar findings were also reported by Guo and Zhang (2013). Based on their review of recent policy changes, Guo and Zhang (2013) noted the Chinese government’s attempt to narrow the gap of the rural-urban dualistic welfare system; they attributed the lower insurance participation of rural-urban migrants to the legacy of China’s rural-urban dualistic welfare system. Therefore, a beyond-hukou perspective must be adopted (Huang et al, 2010). At the institutional level, the problems of the welfare system itself also affect migrants’ willingness to participate in welfare programs. A number of studies (Guan, 2000; Lee, 1993; Saunders and Shang, 2001) have criticized the negative effects of the decentralization of welfare reform since the 1990s. Local governments have assumed most of the responsibility for welfare governance. However, this shift has resulted in the fragmentation of the welfare system and the variability across different regions and cities.


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There are generally three ways of integrating migrants into a welfare system (Guan, 2007). The first is to integrate them into the urban welfare systems in their destinations; the second is to integrate them into the rural welfare systems in their places of origin; and the last is to create a separate welfare system for migrants that is run independently from rural or urban welfare systems. These options have all been tried by different local governments, and the major challenge is how to bridge or unify these different measures and systems. Another negative effect of decentralization in welfare reform is that local governments are more likely to be driven by the market. Guan (2007) noted that city authorities were reluctant to allow simple transfers of funds between cities because they want to avoid any financial losses when migrants move. This observation is also shared by Nielsen et al. (2005). Urban local authorities are likely to be more inclined to include those groups they consider will make greater contributions to the economy and to exclude those groups they do not want. Migrants who frequently move among different places—such as those in the construction sector—will not likely want to contribute to the pools if their insurance contributions cannot be transferred to keep pace with their geographic mobility (Li, 2008). Employment status in labor markets is frequently set as a basic threshold or standard to differentiate who is to be included and who is to be excluded. For instance, participation in an insurance plan requires contributions to be made to an insurance pool. Migrants who are employed informally or irregularly (Li and Tang, 2002) have difficulty making these contributions. A number of studies (Xu et al., 2011; Zhang et al., 2007; Cheng et al., 2014) have shown that employment in the state sector increases the probability of welfare participation and that signing labor contracts plays a role in encouraging employers to contribute to welfare pools for migrants. Using data from the Chinese Household Income Project from 2007 to 2008, Gao et al. (2012) emphasize the importance of long-term labor contracts regarding migrants’ ability to obtain social insurance. Thus, migrants’ positions in labor markets strongly influence their social integration (Guo and Zhang, 2013). Personal characteristics associated with welfare participation have also been examined. The previous literature examines the impact of personal characteristics such as gender, age and education, but they have not reached a consensus on the directions and extent of the impact. For instance, Xu et al. (2011) and Cheng et al. (2014) suggest that female migrants are more likely than male migrants to participate in insurance programs, but Guo et al. (2013) only find gender difference with respect to work injury insurance participation but few differences in other types of insurance plans. Education level was demonstrated to be an important indicator of welfare participation by Xu et al. (2014) and Gao et al. (2012). However,

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data analysis by Cheng et al. (2014) suggests that when more variables are included in the model, education ceases to be significant. Comparing younger migrants with older migrants yields empirical evidence that shows that the two generations have different life experiences and socio-political attitudes (Liu and Xu, 2007; Wang, 2010). Nevertheless, this finding does not clearly demonstrate a higher probability of welfare participation among new-generation migrants (Cheng et al., 2014; Xu et al., 2011). In addition, Nielsen et al. (2005) suggest that the longer the migrants stay in a locality, the more likely they are to participate in welfare programs; in addition, the closer their places of origin are to their destinations, the greater their probability of welfare participation. In contrast with the western literature, attitudes toward welfare are important but have been neglected in discussions on welfare participation in China. Little research has been conducted to explain the impact of welfare attitudes. Cai (2004) is one of the few studies that delve into attitudes toward the reforms initiated by the Chinese government, and that study suggests that reforms in China that generate a great deal of conflict in society may lead to resistance. Cai (2004) hints that trust and confidence toward the government may also affect migrants’ attitudes toward welfare reform, as well as their willingness to participate in welfare programs –this hypothesis requires empirical testing. In addition, how migrants perceive welfare programs is also little understood. A few studies, such as those by Li (2008) and Xu et al. (2011), suggest that increasing migrants’ knowledge about the welfare system and their familiarity with welfare policy can increase the probability of their welfare participation. The impact of migrants’ perceptions of contributions, portability, etc., has rarely been discussed. Therefore, a more comprehensive framework for analyzing different categories of factors is necessary.

Data and Methodology The Shanghai Context Shanghai5 is one of the most attractive destinations for migrants. The 6th census shows that among the 23 million residents of Shanghai in 2010, 8.97 million, or 40 percent, were migrants (Shanghai Statistical Bureau, 2011). Shanghai has 16 districts (qu) and one county (Chongming). Shanghai Proper (see Figure 2) is composed of eight districts, and an additional eight districts

5 The link http://en.wikipedia.org/wiki/Shanghai gives a detailed introduction about Shanghai, accessed on 5 June 2014.


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FIGURE 2 Administrative Divisions in Shanghai

Source: http://www.chinatouristmaps.com/provinces/shanghai.html

and Chongming County comprise the suburban areas. Most migrants, (81 percent), live in the suburban areas, whereas only 19 percent of migrants live in the core of the city (Shanghai Statistical Bureau, 2011). Shanghai was chosen as the survey site for this study not only because of its large population of migrants but also because it is a forerunner in welfare reform for migrants. As in other urban areas, welfare eligibility and benefits differ between local hukou holders and migrants in Shanghai (see Table 1). The extension of welfare coverage to migrants mainly focuses on insurance plans. In early 2000, Shanghai developed a new insurance program called the comprehensive insurance scheme (CIS) that extended social insurance coverage to migrants. This new program was run separately

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TABLE 1 Background Characteristics: Comparison between the 6th Census Data and the Survey Data (Percent)

The 6th Census data The Survey data Living area Central districts Suburb districts Hukou status Rural Urban Gender Male Female Education Primary school and below Middle school High school College and above Occupation Business and service personnel Production and operation personnel Others Sector Manufacturing Construction Wholesale and retail Restaurant and hotel Transportation Others

19.31 80.69

19.30 80.70

79.43 20.57

68.70 31.30

54.28 45.72

60.00 40.00

17.00 52.70 16.27 14.03

11.80 32.40 22.80 33.00

34.01 44.66 21.33

30.40 40.30 29.30

41.20 4.38 18.37 6.82 5.72 23.51

29.70 13.90 10.70 8.10 2.00 35.60

and independently from urban local insurance plans. It was operated by a commercial insurance company under the supervision of the Shanghai municipal government. All migrants with either rural or urban hukou status were eligible to participate. Compared with urban local insurance programs, the migrants did not need to contribute to an insurance pool, and their employers bore all contribution costs. The local urban insurance plans include aging insurance, industrial injury insurance, medical insurance, unemployment insurance and maternity insurance, whereas the CIS only covers payments for industrial injury, hospital treatment beyond a deductible, and old-age allowance after retirement. Because the CIS contribution rate was much lower than that of the urban local insurance system, the migrants were entitled to lower benefits. Efforts have been made to narrow the welfare gap between local urbanites and migrants. Two regulations, concerning urban aging insurance and urban medical insurance, were issued by the Shanghai municipal government in 2009 and 2011. These policies aimed at integrating migrants into


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the urban local welfare system and unifying the divided welfare policies in Shanghai. However, the reform was characterized by transition issues and selectivity. First, the new policy prioritizes migrants who have stable employment in Shanghai. Signing a formal labor contract with employers is a prerequisite for welfare participation, which means that migrants who work irregularly or who are self-employed are not eligible for the local urban insurance plans. Second, the policy treated rural-urban migrants and urban-urban migrants differently. Migrants with urban hukou status are required to participate in five major urban insurance schemes just as the local urbanites do, but such participation is not mandatory for migrants with rural hukou status. For those who have previously participated in the CIS, if they remain under their contracts, they can choose to continue to be covered by CIS or they can participate in the local urban insurance plans after negotiating with their employers. If rural-urban migrants choose to participate in the local urban insurance plan, there is a five-year transition period with a lower contribution rate. After that, their contribution and benefit levels will be the same as those of the local urbanites. Under the local urban insurance plans, rural-urban migrants must participate in at least three schemes — aging insurance, medical insurance and industrial injury insurance, or in all five major plans if their employers are willing to contribute. Both migrants and their employers must contribute to the insurance pool if the migrants enroll in the local urban insurance plans. More details about the new policies are publicly available.6 Overall, migrants are eligible to participate in the CIS in Shanghai. Its shortcomings lie in its incompatibility with the urban insurance plans and its lower benefit levels. The new policy, characterized as selective and transitional, was implemented to integrate migrants into the urban welfare system. Migrants’ welfare participation rates indicate their different levels of social integration. Migrants who do not participate in any welfare program can be categorized as the excluded group, migrants who participate in the CIS can be categorized as the partially included group, and migrants who participate in the local urban insurance plan can be categorized as the included group. The goal of reform should be to integrate the excluded and partially included groups into the included group.

6 For further explanations on the new policies, see http://ld.eastday.com/l/20110714/ u1a900146.html, accessed on 6 June 2014.

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Data Collection The data analyzed in this paper were collected in Shanghai from March to May 2013 by means of a survey entitled “Welfare Attitudes of Migrants and Welfare Inequality in China.” The survey employed stratified sampling in which migrants in Shanghai were divided into two strata. The first stratum consisted of 1,200 surveys administered in the suburban areas and 300 administered in the core city. The second stratum consisted of 1,200 surveys administered among rural-urban migrants and 300 administered among urban-urban migrants. The distribution of the sampled migrants was based on the 6th National Population Census in 2010 (Table 1). The proportion of the surveyed migrants in each district was in accordance with the 6th census. For example, Pudong and Minhang were the two districts that had absorbed the largest number of migrants in Shanghai, with proportions of approximately 23 percent and 13 percent; therefore, 276 and 156 questionnaires were distributed in these two districts, respectively. In total, 1,500 questionnaires were distributed, of which 1,216 were completed, which yielded a valid response rate of 81.07 percent. A comparison between the 6th National Population Census data and the final survey data applied in this paper are presented in Table 2. The distribution of the population in the surveyed data is, for the most part, in accordance with the distribution of the population in the census data. The data applied to this analysis are thus representative. Variables and Measurement Five groups of explanatory variables were examined: (1) personal characteristics, including gender (GENDER), education (EDU), age (AGE) and length of stay in Shanghai (LENGTH ); (2) institutional factors, including hukou status (HUKOU) and participation in the rural welfare system (RURALWELFARE); (3) labor market, including ownership of employment (OWNERSHIP) and labor contract (CONTRACT); (4) five factors associated with welfare attitudes (ATTIEQUAL was used to measure migrants’ trust in government impartiality because it is hypothesized that less trust in the government will decrease the likelihood of welfare participation, CONTRIBUTION measured attitudes toward contribution levels, KNOWLEDGE measured access to information concerning policy, MOTIVATION measured perception of employer motivation, and TRANSFERANCE measured fund transference) were applied to measure how migrants perceived welfare programs; and (5) settlement intention (SETTLEMENT), which measured whether migrants had the intention of permanently settling in Shanghai. Table 2 provides more details on the measurement of these variables.


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TABLE 2 Variables and Measurement Dependent variable

WELFAREPARTI (1) Local urban insurance (2) CIS participation (3) Transit from (2) to (1)

Overall welfare participation = 1; Nonparticipation=0 Yes = 1 No = 0 Yes = 1 No = 0 Yes = 1 No = 0

Explanatory variables Personal characteristics GENDER EDU AGE LENGTH

Male = 1 Female = 2 Middle school = 1; High school = 2; College and above = 3 Before 1980 = 1; 1980 and after = 2 ‘How many years have you been in Shanghai?’

Institutional factors HUKOU RURALWEL

Agricultural Hukou = 1; Nonagricultural Hukou = 2 Participation in rural medical insurance: Yes = 1 No = 2

Labor market OWNERSHIP CONTRACT

State/collective = 1; Foreign-invested = 2; Private and others = 3 Labor contract: Yes = 1 No = 2

Welfare attitudes ATTIEQUAL

“Does government treat everyone equally?” Mostly equal = 1; Occassionally equal = 2; Rarely equal = 3

CONTRIBUTION

“Do you consider that the contribution fees are too high?” Yes = 0; No = 1

KNOWLEDGE

“Do you consider it difficult to obtain policy information?” Yes =0; No = 1

MOTIVATION

“Do you consider the employers are unwilling to contribute to welfare pool?” Yes = 0 No = 1

TRANSFERANCE

“Do you consider it difficult to transfer your contribution funds when you move to other places?” Yes = 0; No = 1

Settlement intention SETTLEMENT

“Are you going to settle down in Shanghai?” Yes = 1; No or I don’t know = 2

The dependent variable is, “Have you participated in the local urban insurance plan in Shanghai?” or “Have you participated in the comprehensive insurance scheme (CIS) in Shanghai?” If the respondents answered “Yes,” we considered it welfare participation; otherwise, it was nonparticipation. Migrants participating in the local urban insurance plan were categorized as

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the included group, and migrants participating in the CIS were categorized as the partially included group. The variable WELFAREPARTI combined participation in the two different programs to measure overall welfare participation in Shanghai. When the respondents were not participants in any welfare programs, WELFAREPARTI was equal to 0, which categorized them as the excluded group. Because Shanghai is in a transitional period of extending local urban insurance coverage to migrants, there are some migrants who participated in both schemes. They are the migrants who switched from CIS to local urban insurance, and they might be understood to be shifting from the partially included to the included group. Table 3 presents summary statistics for welfare participation in Shanghai. There were 1,188 responses to the welfare participation questions, and 526 of the respondents had participated in welfare programs, for an overall participation rate of 44.28 percent. The excluded group, which is characterized as nonparticipation in any welfare program, accounted for 55.72 percent of the respondents. The migrants participating only in local urban insurance (n=182), the included group, outnumbered the partially included group, who only participated in comprehensive insurance (n=147). There were 197 respondents who had previously participated in CIS and who had subsequently switched to the local urban insurance program; this group had experience with both programs, and they were categorized as being in transition from the partially included to the included group. These findings suggest that migrants who participated in local urban insurance were better educated, much younger, and less likely to participate in rural insurance in comparison with migrants who participated in comprehensive insurance. Both differences and similarities could be observed from these two programs. The migrants who participated in local urban insurance were more concerned with contribution levels and employers’ motivation to contribute, whereas migrants participating in CIS were more concerned with fund transfers. Both programs seemed to attract individuals who had lived in Shanghai for 5-6 years, had labor contracts, and believed in government impartiality, in addition to having adequate policy knowledge. The comparison of migrants in transition with those who retained their comprehensive insurance suggests that the migrants in transition were better educated and younger, contributed more to the welfare pool, and were also more likely to settle permanently in Shanghai . This study first examines the extent to which the five groups of explanatory variables affect the overall welfare participation of migrants in Shanghai by applying binary logistic regression models to address the question “What accounts for migrants’ nonparticipation in Shanghai’s welfare programs?” The migrants who are excluded from participating in welfare programs are

MIN

MAX

N Mean S.D. N Mean S.D. N Mean S.D. N Mean S.D. N Mean S.D.

GENDER 1.00 2.00 182 1.42 0.50 147 1.50 0.50 197 1.44 0.50 526 1.45 0.50 662 1.35 0.48 EDU 1.00 3.00 182 2.26 0.88 147 1.84 0.83 197 2.53 0.39 526 2.25 0.87 662 1.61 0.77 AGE 1.00 2.00 182 1.72 0.45 147 1.59 0.50 197 1.82 0.77 526 1.72 0.45 662 1.59 0.49 LENGTH 0.00 40.00 182 5.94 5.60 147 7.16 5.41 197 5.43 6.07 526 6.09 5.76 662 5.58 5.06 HUKOU 1.00 2.00 167 1.43 0.50 136 1.29 0.45 197 1.45 0.50 453 1.40 0.49 609 1.25 0.43 RURALWEL 1.00 2.00 182 1.77 0.42 147 1.49 0.50 197 1.66 0.47 526 1.65 0.48 661 1.35 0.48 OWNERSHIP 1.00 3.00 182 2.03 0.94 147 2.18 0.87 197 2.07 0.93 526 2.09 0.92 662 2.60 0.75 CONTRACT 1.00 2.00 182 1.07 0.25 147 1.16 0.36 197 1.11 0.32 526 1.11 0.31 661 1.51 0.50 ATTIEQUAL 1.00 3.00 182 1.84 0.86 147 1.78 0.85 197 1.82 0.46 526 1.82 0.85 660 2.01 0.85 CONTRIBUTION 0.00 1.00 181 0.35 0.48 147 0.24 0.43 197 0.43 0.50 525 0.30 0.46 662 0.25 0.44 KNOWLEDGE 0.00 1.00 182 0.35 0.48 147 0.28 0.45 197 0.44 0.50 526 0.36 0.48 662 0.27 0.45 MOTIVATION 0.00 1.00 182 0.52 0.50 147 0.34 0.48 197 0.22 0.41 526 0.44 0.50 661 0.26 0.44 TRANSFERANCE 0.00 1.00 182 0.18 0.38 147 0.27 0.45 197 0.30 0.85 526 0.22 0.41 661 0.21 0.41 SETTLEMENT 1.00 2.00 380 1.38 0.49 147 1.60 0.49 197 1.26 0.44 526 2.52 0.70 658 1.60 0.49 Notes: (1) represents the included group; (2) represents the partially included group; (3) represents transition from the partially included group to the included group; (4) includes the partially included group, the included group and the transitional group; (5) represents the excluded group.

(1) (2) (3) (4) (5)

Local urban Comprehensive Non insurance insurance Transition from Overall participation in participation participation (2) to (1) participation any program

TABLE 3 Summary Statistics of Welfare Participation in Shanghai

MIGRANTS’ PARTICIPATION IN WELFARE PROGRAMS 197

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the focus of this part of the analysis. Subsequently, by applying multinomial regression model to compare welfare participation among three migrant groups — the partially included, transitional and included groups — the study then explores the question of why some migrants are more included than others. The answers to these questions might help in understanding how migrants in China’s metropolises are included or excluded.

Empirical Results Factors Influencing Nonparticipation in Welfare Programs Based on the analytical framework discussed above, five categories of factors were examined (see Table 4). Models 1–5 examine the influences of nonparticipation in welfare programs in Shanghai with reference to overall participation, which combines participation in both CIS and local urban insurance plans. The results from Model 1 suggest that all the personal characteristics contributed to explaining nonparticipation in welfare programs. Nonparticipation is affected by gender, age, education and length of stay in Shanghai and suggests that male, older and less-educated migrants are less likely than female, younger and more highly educated migrants to participate in welfare programs. The results also align with the earlier findings by Nielsen et al. (2005) that the length of stay in Shanghai increases the likelihood of welfare participation. Model 2 contains two institutional factors—hukou status and participation in the rural welfare system. After controlling for personal characteristics, rural hukou status is not statistically significant in explaining nonparticipation in welfare programs. This finding can be explained by the fact that urban hukou status is gradually losing its privileges among migrants and welfare eligibility for migrants with different hukou statuses is becoming equal in Shanghai. Studies by Zhang et al. (2007) and Cheng et al. (2014) also suggest that the hukou impact is no longer important when other factors such as labor contracts, are controlled for. These findings imply that the rural-urban welfare divide is no longer relevant in explaining the welfare inequalities among migrants in new destinations. Participation in rural medical insurance has a negative impact on welfare participation in Shanghai. This finding may reflect the duplication of welfare programs. The Chinese central government began to implement rural medical insurance reform in 2003 and intended to extend rural medical insurance to all rural people. After the government applied a relatively lower contribution fee, rural medical insurance coverage rose by 97 percent


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TABLE 4 Odds Ratios of Nonparticipation in Welfare Programs in Shanghai Ref: overall participation

Model 1 Model 2 Model 3 Model 4 Model 5

GENDER (ref: male) 0.66 ** 0.69 ** 0.52 *** 0.48 *** AGE (ref: new generation) 1.49 * 1.39 1.39 1.60 * EDU (ref: college and above) Middle school or below 7.53 *** 6.37 *** 4.80 *** 4.59 *** High school 4.21 *** 3.53 *** 3.09 *** 2.99 *** LENGTH 0.91 *** 0.91 *** 0.89 *** 0.89 *** HUKOU (ref: urban hukou) 0.87 0.76 0.78 RURALWEL (ref: No) 2.43 *** 1.89 *** 1.91 *** OWNERSHIP (ref: State/collective owned) Foreign owned 1.28 1.23 Private and others 2.36 *** 2.12 *** CONTRACT (ref: Yes) 6.61 *** 6.91 *** CONTRIBUTION (ref: No) 1.44 * KNOWLEDGE (ref: No) 1.10 MOTIVATION (ref: No) 1.93 *** TRANSFERANCE (ref: No) 1.55 * ATTIEQUAL (ref: Mostly equal) Occasionally equal 1.72 *** Rarely equal 2.30 *** SETTLEMENT (ref: Shanghai) N Model chi-square -2 Log likelihood Cox & Snell R square Nagelkerke R square

0.48 *** 1.59 * 4.58 *** 2.98 *** 0.89 *** 0.78 1.91 *** 1.23 2.20 *** 6.91 *** 1.44 * 1.10 1.94 *** 1.55 * 1.72 *** 2.30 *** 1.01

1054 1054 1054 1054 1054 191.53 *** 227.91 *** 395.4 *** 434.23 *** 434.23 *** 1248.21 1211.83 1044.33 1005.50 1005.50 0.17 0.19 0.31 0.34 0.34 0.22 0.26 0.42 0.45 0.45

Note: *p