| Migrant worker is a new social group immerging with the industrialization and urbanization after China has taken the reform and opening up policies. The number of the migrant workers increases dramatically with the country’s industrialization and urbanization. Migrant workers belong to industrial workers in terms of career category, but their household registration status is farmers.Migrant workers have dedicated their youth time to the city construction, but they are excluded from the endowment insurance system for urban citizens when they are getting older. In recent years, the central government attaches great importance to the endowment insurance system, and the local governments (such as those of Beijing, Shanghai and Shenzhen) have introduced the endowment insurance policy for migrant workers. However, the event occurred at the end of 2009 that migrant workers queued through the night to surrender the insurance policy has been a test for the new insurance policy of migrant workers.What is the right course for the endowment insurance policy of migrant workers in China to follow? How to design the endowment insurance system? Based on the current theory of endowment insurance, considering the social reality in China, this paper discusses and explores the following three issues:1) Whether or not to build the endowment insurance system for the migrant workers? 2) What kind of the endowment insurance system should be built? 3) How to set up the endowment insurance system?As for the issue ’whether or not to build the endowment insurance system for the migrant workers’, necessity and possibility are elaborated in the paper from the perspectives of both theory and practice, including the comparative study between those in history and present time, at home and abroad, in the urban and rural areas, and a comprehensive analysis and prediction are made in terms of the conditions for setting up the endowment insurance policy for the migrant workers in China. Five reasons for setting up the policy are also put forward in this paper. Firstly, the number of migrant workers is growing and the structure is changing. It is reported that in 2009 the number of migrant workers working in the city for more than 6 months comes to 145 million, and the number working in the township comes to 84 million, with the total number being 229 million. With the speed up of the urbanization in China, the number of migrant workers will still continue to increase. At the same time, the structure of migrant workers is changing, with the new generation of migrant workers becoming the main force of migrant workers. Compared with the traditional migrant workers, some new features have imergered, including the change from engaging-in-both-agricultural-and-industrial-production to engaging in non-agricultural-production-full-time, from striving for survival to pursuing equality, from movement from-rural-to-urban-cities to melting into the city.Secondly, migrant workers, as an important component of industrial workers, have made great contribution to the national economic development. A survey made in 2005 showed that the proportions of migrant workers in the fields of construction, manufacturing and food wholesale and retail industry were 80%,68% and 52% respectively. As an important component of informal employment, migrant workers have made great contributions to meet the diversified needs of urban residents, created advantages of low-cost for labor-intensive industries and improved the international competitiveness. The empirical analysis in Section I of Chapter II shows that migrant workers in informal employment play an important role in the growth of the national economy with the increase of every 10,000 people in informal employment, value contributed to the second and tertiary industries being 1.5 billion yuan and 1.35 billion yuan.Thirdly, migrant workers are the forerunners of the urbanization process, and are the consumers that can not be ignored. Historical experience has shown that urbanization is the only route to industrialization and modernization. The average age of the migrant workers are 28.6, and the average years of education are 8 years (higher than the national average year of 6), with 28.2% of migrant workers having some technical skills. Migrant workers are not only elites in rural but also pioneer groups of urbanization in China. However, due to the urban-rural dual structure of economic and division of endowment insurance system in urban and rural areas, it is difficult for migrant workers to be really involved into the urban society. The establishment of the endowment insurance for migrant workers not only can improve the needs to and abilities of being involved in the urbanization but also can help transform the migrant workers into new consumer groups to speed up the virtuous circle of economic development and urbanization process.Fourthly, the function of traditional endowment mode has been weakened, and the new pension model for the migrant workers has not yet to be established.It is predicted that by 2020 China’s elderly population aged over 60 will reach to 248 million (the rate of social aging being 17%), with elderly population in the rural areas making up more than 2/3. Social aging of the population is a common problem to both the urban and rural areas. Though the flow of migrant workers groups has lessened the aging problem in urban areas, the degree of aging in rural areas has been aggravated. Deducting the money for consumption and household spending, almost nothing is left for migrant workers with low-income (average salary being 1,400 yuan in 2009). For those migrant workers who have comparatively frail awareness of the risks for the elderly, the model of individual pension is apparently lacking of solid basics and possibilities. With the changes in family structure and the weakening of the economical function of land, people can no longer depend on the traditional way of family pension. Even though China has gradually established a multi-level social endowment insurance system, covering the urban enterprise workers, government employees, institution staff and farmers, the migrant workers become the "marginal" groups which is not covered by the social pension system.Fifthly, the establishment of endowment insurance system for the migrant workers is the responsibility of the government. Report of the 17th National Congress of the Communist Party of China set it a goal "to establish the basic system of social security to cover both the urban and rural residents, everybody enjoying the basic subsistence allowances", and make this as a goal for the country to achieve a moderately prosperous society. The theoretical basis for the government to carry out includes the following three points:1) China has the economical power for adopting the endowment insurance system for migrant workers. Most countries have set it an economic criteria that the endowment insurance system would be established only when the per capita GDP reaches to US$2000. Per capita GDP in China now has surpassed the average economic level of that of the 13 European countries, Japan and other Asian countries and regions when those countries establish the rural (farmer) old-age insurance system.2) To protect people’s livelihood and to promote social equity, the equalization of supply of public goods is needed. The goal of building a harmonious society also calls for that the government should strive to achieve the equalization of supply of public goods and, protect and promote the social equity. Migrant workers are not equally treated, and there exist the phenomenon of "Unequal pay for same work" and "different rights in the same city". In order to maintain the fairness and justice in a harmonious society, the endowment insurance system which is consistent with the characteristics of migrant workers should be established.3) The establishment of endowment insurance system for migrant workers is in accordance with the law of "two trends". Hu Jintao, General Party Secretary, puts forward the statement "in the early stage of industrialization, that agriculture support industries is a general trend; in the later stage of industrialization, that industry nurtures agriculture and that cities support rural areas are also general trends.". The establishment of endowment insurance system for migrant workers is in line with the law of "two trends" and is an important practice of scientific development initiatives.What kind of endowment insurance system for migrant workers should be built? The paper does not rush to the topic of how to design the specific system, the contents and the framework, but points out the problems existing in the current endowment insurance system through analyzing its present condition. Based on the survey made in Shenzhen, the paper tries to identify the key factors for impacting and restricting of the needs for endowment insurance. The paper also proposes the principles for designing the endowment insurance system, based on the experience from other countries, and it also analyzes the paths to endowment insurance for migrant workers.By analyzing the endowment insurance policy in Beijing, Shanghai and Shenzhen,Chapter IV sums up four problems existing in the operation of the endowment insurance system:1) Some migrant workers don’t fully understand the system.2) The employers lack of motives to establish the system.3) The local governments don’t put full effort to the establishment of the system. The paper also points out the defects in the design of endowment insurance system (high base, high proportion and difficult to transfer). In the process of establishing the endowment insurance system for migrant workers, there also exist some other defects, including "three shortcomings" (the lack of legal basis, lack of a unified model and the lack of supporting systems and management practices).While in other countries, the term "migrant worker" is rarely used in theoretical studies, but the transferring and flowing of the surplus rural labor did occur during the process of industrialization and urbanization in some developed countries. By analyzing and comparing the endowment insurance system arrangements for the rural labors in the process of urbanization in the EU countries, and the reforms made in the pension system, Chapter V puts forward three points. First, appropriate arrangement of the endowment system for the rural labors has help speed up the development of urbanization. In order to promote the rational flow of the surplus labor forces in the rural areas, some countries such as the United Kingdom, France, Germany and the United States have adopted such measures as making appropriate arrangements for the migrant workers in terms of endowment insurance based on the different characteristics in different period of time and different phases. The social insurance system for the flowing rural labors not only helps them get rid of worries, but also promotes the development of urbanization. Second, the design of accumulative pension insurance will promote the rational flow of labor. Third, the role of personal accounts has become increasingly prominent in the multi-pillar pension model. With the concepts of "three pillars" (1994) and "five pillars" (2005) proposed by World Bank, many countries have reformed the traditional pension system model, and the model of individual pension has drawn more and more attention. Chile is the model country as its personal pension insurance system has achieved great success and has become the object for many other countries to follow. In the United States and Germany, individual accounts pension have taken up more than 30% of the whole pension account.Based on Shenzhen survey, by using SPSS software, Chapter VI has made qualitative analysis and Logistic empirical study of the determining factors for the endowment insurance for the migrant workers. The conclusion made from the qualitative analysis is that:migrant workers with the age of 35-40 years old, monthly salary being 1500-3000 yuan, relatively high education level, showed strong demand for endowment insurance, while the "low income and high social security costs" are the most prominent factors of impacting migrant workers for buying insurance. Logistic empirical analysis concluded that the demands of migrant workers for endowment insurance are influenced by four critical factors:age, income, employment status and that whether or not the labor contract is signed. Three factors which constrain the needs of the migrant workers for endowment insurance include the affordability of migrant workers; the affordability of enterprises and the responsibility of the government.Is it necessary to operate independently the endowment insurance system for migrant workers? What are the guarantees in terms of policy-making for independently operation? Is "social pooling" needed or not? Chapter VII answers the above three questions.At present, there are barriers for migrant worker being admitted into the pension insurance system of urban citizens (high base, high percentage and 15 years for paying insurance fees). The phenomenon of migrant workers queuing through the night to surrender in Guangdong is the negative answer to consequences of this model. If the migrant workers are brought into the new rural endowment insurance system, there mights be some practical problems, such as unfair to migrant workers, low level of pension security, increase of urban poverty, not conducive to the development of urbanization.The paper proposes that it is a historical necessity to operate independently the endowment insurance system for migrant workers, based on the following three major reasons:1) There really exsit the differences in pension systems for different groups of people; 2) It requires a long time to establish a unified pension system; 3) The endowment insurance system for migrant workers is related with the fairness and harmony of the society.Based on the interpretation for "Migrant Workers Participating in Basic Pension Insurance Policy" (put forward by the Central Government in 2009), Section II of Chapter VII proposes a model of individual accounts of endowment insurance for migrant workers.If we set the payment base as "60% of the average income of urban citizen in the previous year in the urban city ", we can, on one hand, help the migrant workers reduce the stress for insurance payment, on the other hand, to create the conditons for the linking up between the insurance system for migrant workers and the pension system for the citizens in town. If 12% is set as the paying rate for the enterprises to pay their portion, we can safeguard the rights of migrant workers and reduce the affordability burden of the enterprises. If the flexibility ratio 4%-8%is set as the percentage of personal payment, the short-term goal of "low level and wider coverage" can be achieved.As for the question of how to operate the endowment insurance system for migrant workers, through a comparative analysis of the operating models of individual account pension in Singapore and Chile and the analysis of the successful operation of the National Social Security Fund in China and the domestic enterprises, some enlightments are proposed in Section I and II of Chapter VIII.The operation models in Singapore and Chile, together with the pratices of the National Social Security Fund and the domestic enterprises, have illustrated the enlightenments in three aspects. Firstly, pension system on market operation is more efficient and effective than that on government operation. Secondly, it is better for the government to select the fund managers than that done by the migrant workers themselves. Thirdly, the government should provide guarantee for the lowest profits of operating the individual account fund.With the analysis of the advantages of commercial pension insurance companies involved in operating the migrant workers pension funds, Section III and IV of Chapter VII propose two innovative designs: First, provincial-level coordination of the individual account fund for the migrant workers is put forward. Unified national system can better reflect the mandatory and authority of the endowment insurance system, while the provincial-level pension fund management for migrant workers is more realistic and feasible, not only avoiding the division of local finance problems, but also being in line with the trends of the policy about the basic provincial coordination of the endowment insurance.Second, the paper proposes a "3+1" operating model for the individual account fund for the migrant workers. Through public bidding, select the professional pension insurance corporations which have the background of large insurance group as "Fund’s trustees", "Account Manager" and "investment manager", select the commercial banks as the "Fund’s custodian." The "3+1" model of migrant workers pension funds can not only achieve the goals of the scale operations, but also solve the technical problems of endowment payment, and at the same time both the commercial insurance and the social insurance can achieve "win-win". Then the framework and management process under the "3+1" model are designed.Based on the survey made in Beijing, Shanghai and Shenzhen, Chapter IX measures the operation cost and security level of individual accounts of endowment insurance system for migrant workers. The results of the measurements show that the design of the system increases not only the burden for the enterprises (costs increased by+88 yuan,-8.7yuan and+114 yuan respectively for the enterprises in Beijing, Shanghai and Shenzhen), but also the burden for the migrant workers. Aassuming that the personal payment for the insurance takes up 5%, the personal costs for migrant workers increase to+38 yuan,85 yuan and+26 yuan respectively in Beijing, Shanghai and Shenzhen. But the increased range is within an acceptable scope.Assuming that the wage growth rate is 3%, the annual investment return rate of the fund is 4%, the cumulative paying period is 30 years and the average life expectancy is 15 years, the endowment replacement rate of the individual accounts for the migrant workers will be 45.33%, consistent with Convention No.102 in ILO (1952).If the migrant workers are willing to enter the basic pension system for urban citizens, they can have much better pension treatments than those stipulated in the individual account Take Shenzhen as example, if the migrant workers choose individual accounts, after paying for consecutive 15 years, the endowment replacement rate for the individual pension accounts is only 22.2%, far lower than 39.9%, the number for the endowment replacement rate for urban citizens. Individual account for migrant workers is a kind of transitional endowment insurance model, and it will eventually quit the historical stage with the deepening of China’s urbanization and unity of urban-rural pension insurance.This paper tries to be innovative in the following areas:①Based on the survey made in Shenzhen, try to classify the migrant workers from two dimensions, one being "whether salaried", the other being "whether engaged in informal employment", and to propose different types of arrangements for the endowment insurance system for migrant workers;②Base on the interpretation of the related policies put forward by the central government, such as "Basic Pension Insurance Schemes for Migrant Workers" (Feb.2009), "Interim Regulations for the Transfer of the Basic Pension Insurance" (Feb.2010), the paper designs a model of individual account endowment insurance system which is national unified and fully accumulated, making the model very operational;③Based on the national unified system designed, the paper propose a provincial management model of the pension fund for the migrant workers, which is more realistic and feasible, not only avoiding the division of local finance problems, but also being in line with the trends of the policy based on provincial coordination about the basic endowment insurance;④With reference to EA’s business operating model, the paper proposes a "3+1" model for pension funds for the migrant workers. Through public bidding, select the professional pension insurance corporations which have the background of large insurance group as "Fund’s trustees", "Account Manager" and "investment manager", select the commercial banks as the "Fund’s custodian"; and the details of the operation frame and management flow have been designed;⑤By using SPSS 12.0 and Logistic model, quantitative analysis is made on the needs and influences of the migrant workers for endowment insurance. By using the software Eviews, the contribution of informal employment to economic growth is analyzed. Qualitative and quantitative analysis are made in the paper on such issues as the affordability of the migrant workers, the affordability of the enterprises and the security level of the individual endowment insurance.Further more research is needed from the perspective of multidisciplinary, the study for the duties and responsibilites relating with the endowment insurance for the migrant workers and interests of government.
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