Social inequalities and wage, housing and pension reforms in urban China

This paper studies the sources of social inequalities largely neglected by the previous researches on urban China’s socio-economic reforms. The research focuses on the policy guided differential treatments to the employees of non-enterprises and the employees of enterprises in the reforms of the work related rewarding schemes, including wage, pension and housing. A simple model is developed to look at the determinants of individuals’ total work rewards and the combined effects of these reforms. The authors use the model to explain the logic behind the seemingly random welfare reform policies and their interactions with the wage reforms. This paper argues that the average amount of reward for the nonenterprise employees is consistently higher than that for the enterprise employees in all the three aspects of wage, housing and pensions. The gap has widened in recent years. The welfare reforms reinforce the income inequalities between the two groups.