Political institutions, skill formation, and pension policy: the political-economic logic of China’s pension system

Thesis

A central theme in the comparative political economy of the welfare state is the complementaries between political institutions, social policy, and labour markets. Yet little has been written to uncover this political-economic nexus in China, the world’s second largest economy. This thesis partly addresses this gap by studying the country’s public pension arrangement, the most expensive component of the Chinese welfare state. It reveals the working of the political-economic nexus in contemporary China by showing how it leads to two puzzling characteristics of the Chinese pension system, namely the rapid expansion in the absence of electoral pressures and the persistent regional fragmentation despite an authoritarian central government. It argues that the decentralised authoritarianism, in which China’s authoritarian central state delegates to regional governments and motivates them to achieve its developmental goals, drives municipal authorities to compete with each other in generating economic growth. In the inter-municipal economic competition, local leaders adopt an expansionary yet localising pension policy. This facilitates the formation of specific industrial skills, which are productive for particular local industries, and the retention of skilled industrial workers. All of this is important to local economic development in a context of industrial upgrading and labour market tightening. It is argued this is the political-economic logic of China’s pension system.

Authors: Meng, K

• Publication date: 2014
• DOI: 10.5287/ora-koemwqbbb
• Type of award: DPhil
• Level of award: Doctoral
• Awarding institution: Oxford University, UK
• Language: English
• Keywords: labour market; varieties of capitalism; pension; skill formation; China; comparative political economy of the welfare state
• Subjects: Social policy & social work; Pensions; Public policy; Political economy of markets and states; Welfare state reform and change; Human resource management