The segmentation of the social protection system in China makes the system inequitable and inefficient.Employees in the public sector, particularly civil servants, are overprotected,while employees in the nonpublic sector,especially farmers and rural migrant workers,are underprotected. Segmented pension insurance system impedes labor mobility and increases administrative costs.The polices,such as implementation of the New Rural Cooperative Medical System,New Rural Old-age Insurance Scheme, as well as the polices to promote migrant workers to participate in social insurance programs for urban employees,help improve the equity of social protection. However,the competition between different local governments on increase in welfare and overburden of the local finance due to escalating social expenditures have affected the sustainability of social protection programs.The following measures need to be taken to solve such problems. First is to avoid using social insurance coverage as an indicator to evaluate the performance of government officials. Second,on the one hand, the social spending responsibilities of the central government need to increase,and on the other hand,public transfers to less development regions need to augment for enhancing social assistance and merit goods provision.Third is to reduce and remove the segmentation of social protection system through integrating or combining various segments under the same insurance program.
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