I thank Enid O. Cox, Irwin Garfinkel, Stephan Haggard, Sheila B. Kamerman, Andrew J. Nathan, Carl Riskin, Michael Sherranden, Jane Waldfogel, Fuhua Zhai, and two anonymous reviewers for very helpful comments and suggestions. Financial support for this project was generously provided by the V. K. Wellington Koo Fellowship through the Columbia University Weatherhead East Asian Institute.Google Scholar

1. This article studies the social benefit system only in mainland China, given that Hong Kong, Macao, and Taiwan have different political and economic schemes as well as different social benefit systems. For simplicity, “China” in this article refers only to mainland China. The unit for the Chinese currency renminbi is yuan, or denoted as “¥.” The current exchange rate is 1 US Dollar = 8.09 yuan.Google Scholar

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25. Ibid.; Li, and Piachaud, , Poverty and Inequality and Social Policy in China. Google Scholar

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27. Ibid.; Rösner, , “China's Health Insurance System in Transformation.” Scholars documented different starting times of individual city's reform trials. For example, Rösner reported earlier times for both Shenzhen, and Shanghai, (1992 for Shenzhen and 1994 for Shanghai) than Duckett (1995 for Shenzhen and 1996 for Shanghai). I took the earlier dates here because Rösner also provided procedural details. The inconsistency may be due to (a) the lack of formal documentation by local governments and (b) selection of different personnel that the authors interviewed to collect data. However, the authors' descriptions of the reform contents remain mostly consistent.Google Scholar

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32. Administrative data on national government education expenditure help explain how big such an omission is. The share of government input on higher education in total education expenditure was strikingly high at 58 percent in 1988, while it dropped to only 23 percent in 2002. Therefore, the omission of higher education from this analysis hugely underestimates education benefits, to a larger degree in 1988. Government spending on early childhood education constituted only 1 percent of total education expenditures in both years and thus may not incur as big an omission. However, it is an important government benefit for families with young children and should be studied in future work. Sources: China Provincial Education Expenditure Annual Development Report 1989 and China Statistical Yearbook 2004. Google Scholar

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52. Eligibility for unemployment benefits was up to twelve months for those who had continually paid unemployment insurance premiums for one to five years, eighteen months for those paid for five to ten years, and twenty-four months for those paid more than ten years. See IOSC, White Paper on China's Social Security and Its Policy.Google Scholar

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58. Primary factors considered included local residents' average income and consumption level per capita, the price level of the previous year, the consumption price index, the local cost necessary for maintaining a basic livelihood, materials for the basic needs of food, clothing, and housing, and the expenditure on children's compulsory education.Google Scholar

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69. Different equivalent scales have been proposed and adopted in the existing literature, mostly when studying the Western industrialized nations. Some scales are proposed for studying developing countries, but there seems no particular fit for urban Chinese households. I also ran the results using the OECD equivalent scale that accounts for household size by dividing household income by the square root of household size, and the result patterns largely remain the same. All missing values—except for health benefits in 1988 and education benefits in both years that are imputed using administrative data— are imputed using multiple regression models controlling for individual and household sociodemographic characteristics.Google Scholar

70. These included salary (including bonus) from working for an employer, wage from secondary jobs, and other “income from compensation” (buchang shouru), fees paid by relatives or friends who regularly ate in, and in-kind incomes from others as a form of payment.Google Scholar

71. In 1988, taxes and fees paid for private enterprises or self-employment were asked separately, and then subtracted from the total reported gross income from this type of employment. In 2002, families were directly asked to report the net income from private enterprises or self-employment. Thus, the two years' data are compatible in this regard, but it was impossible to know the amount of taxes and fees paid for private enterprises or self-employment in 2002.Google Scholar

72. The 1988 market value of rent was not directly asked in the survey and thus is estimated by a formula adopted by the CHIP Research Team, accounting for both provincial construction cost at the time and sanitary facilities of the house as reported by survey participants. In 2002 families were asked to estimate the market rental value of the housing. Rental value of owner-occupied housing is then imputed by subtracting self-reported debts or loans on housing from the estimated market rental value of housing. The rental value of owner-occupied housing made up 8 percent of total household market income in 1988 and 5 percent in 2002.Google Scholar

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79. ECEC benefit was asked in the 1988 survey but not in 2002, while there is a lack of administrative data on ECEC in China to do imputation. Administrative data on higher education (technology or vocational school, normal school, and college or university education) are available in both years. However, students in such higher education institutions often lived in campus dorms both years and thus were most likely not covered in the household surveys. Some employers—particularly public institutions and state and collective enterprises—often provided other cash or in-kind education benefits such as advanced training and educational materials to employees, especially before and during the early stages of the reforms. The 2002 survey asked about such education benefits from employers, but such questions were not included in the 1988 survey. To be consistent, this study does not count this type of education benefits.Google Scholar

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