Building Social Safety Net in a Transitional Society: Inequalities in Public Transfers in China

Ke Shen, Fudan University
Feng Wang, University of California, Irvine

We examine aspects of inequality in China’s recent efforts to build a social safety net during its rapid economic and social transformations. Utilizing the National Transfer Account (NTA) approach, we analyze benefit incidence of public transfers across generations and across socioeconomic groups, with the latter including urban and rural residence types, gender, and household income groups. We focus on three types of public transfers: education, health care, and public pension. Results from our preliminary examinations reveal a pattern of inequality across generations and between socioeconomic groups. Public transfers in China as a whole are unevenly distributed across generations, with spending on the elderly twice as much as that on the young. Public pension, one of the public transfers, is highly regressive, with rural residents, women, and lower income groups receiving much lower pension benefits than the socially more advantaged groups.