Research On The Impact Of Urban Basic Medical Insurance System On Informality

The reform of the basic medical insurance in urban China can be divided into different stages.In 1998,Chinese State Council promulgated the Decision about the Establishment of Basic Medical Insurance for Urban Employees(UEBMI)for Urban Workers”,which formally established the basic medical insurance system for urban employees.However,the urban basic medical insurance system only covered urban workers,the majority of the informal workers cannot be covered by social medical insurance through UEBMI.In 2003,China promulgated the Guidance on urban informal workers participating in Basic Medical Insurance for Urban Employees.This guidance permits the urban informal workers to participate in UEBMI without work unit.However,due to the requirements of "higher payment level","stricter payment" and "continuous payment",thousands of informal workers can not be covered by UEBMI.Since 2007,according to the Guidance of the State Council on the Development of Basic Medical Insurance for Urban Residents(URBMI),China first developed URBMI in 79 pilot cities,and formally implemented URBMI nationwide in 2009.The urban basic medical insurance covers all people who were not covered by UEBMI.Therefore,a new urban basic medical insurance system is formed,which consists of UEBMI and URBMI.In January 2016,China issued the State Council’s Opinions on Integrating the Basic Medical Insurance System for Urban and Rural Residents,which indicated that all local governments should integrate the New Rural Cooperative Medical System and URBMI before the end of 2016.Basic Medical Insurance for Urban and Rural Residents covered urban and rural residents,and had unified finance,unified treatment,unified medical insurance catalogue,unified fund management and unified designated management.In literatures,medical insurance usually has an important impact on the labor market.As a part of the employment welfare and employment security,through labor contract,it becomes a implicit welfare.When changing jobs or choosing jobs,the workers will not only consider the salary,but also consider the implicit welfare.In the period of old urban basic medical insurance,the differences between the high security of formal employment and the lack of security of informal employment has resulted in the unequal status of formal employment and informal employment workers in the labor market.The informal employment tends to be in a weak position: young people in cities and towns,especially those with high educational background and high quality,tend to choose formal employment in their first choice of work;for adults who have already engaged in informal employment,they tend to convert to formal employment.The coexistence of the above two situations will lead to serious inequalities in the development of formal and informal employment in cities and towns.On one hand,the old urban basic medical insurance has seriously hindered the mobility of labor force,affecting the efficiency of the allocation of labor resources.On the other hand,when formal departments can not accept all workers who want to be formal workers,unemployment rate may increase and labor mismatch may occur.Improving urban basic medical insurance may changing this situation.Since 2007,the implementation of URBMI changed the old urban basic medical insurance,and formed the current urban basic medical insurance system,which consisting of UEBMI and URBMI.The current urban basic medical insurance may have the following effects on informility: First,URBMI(or basic medical insurance for urban and rural residents)covers urban residents no matter what types of employment.It reduced the cost of conversion from formal work to informal workt,and promote the mobility of workers from formal employment to informal employment.On the other hand,the increase in the value of informal employment reduced the value of formal employment,and may also reduce the probability of informal employment turning into formal employment.Secondly,current urban basic medical insurance increases the value of informal employment relative to formal employment,which may improving informal choice of young adults.Third,the current urban basic medical insurance may have a negative impact on urban informal employment.Due to the improvement of workers welfare level,the labor participation of informal workers,especially the elderly,may reduced.In order to verify the above theoretical hypothesis,this paper studies the above issues from the following aspects: first,introducing the relevant theories and literatures about labor supply,job turnover and medical insurance on the labor market;secondly,introducing the medical insurance system on informality of typical foreign countries,and analysis the differences between typical foreign countries and China.The comparison of medical insurance system is helpful for us to analyze the uniqueness and complexity of Chinese medical insurance reform under the special national conditions,and get some inspirations from typical foreign countries.Thirdly,introducing the development process of urban basic medical insurance in China and its possible influence on the labor market.Fourthly,this paper empirically studies the theoretical hypothesis of this paper by using microlarge sample data,and analyses the impact of urban basic medical insurance reform on informal employment.Finally,this paper summarizes the conclusions of this paper and gives some suggestions for the conclusion.This paper consists of 8 chapters.The structure is as follows:Chapter 1: the introduction of this paper.In this chapter,this paper introduces the reason why studying this issues,practical significance and theoretical significance of the research,and summarizes the research content of this paper.Finally,it puts forward the research ideas,research framework,research methods,innovation and shortcomings of this paper.Chapter 2: the introduction of the basic concepts,theories and the mechanism analysis of the impact of medical insurance on informal employment.Firstly,this chapter explains and defines several important concepts in detail,and then introduces the relevant theories of this paper,including the theory of labor supply,the theory of job turnover,the theory of medical insurance and its impact on the labor market.Based on the above basic theory,this paper establishes a static labor supply model to analyze and estimate the mechanism of the impact of changes in urban basic medical insurance system on informal employment.Chapter 3: the introduction of the medical insurance model of typical foreign countries.By analyzing the medical insurance system of typical countries,this paper finds that there are significant differences between the medical insurance model of typical countries and the basic medical insurance system of China.In addition,we can also get some enlightenment from the analysis of the impact of medical insurance system on informal employment in typical foreign countries--the impact of different medical insurance models on the labor market may be different.Therefore,it is necessary to analyze the impact of medical insurance reform on informal employment based on China’s special national conditions.Chapter 4: the introduction of the process of urban basic medical insurance reform and its impact on informal employment.In this chapter,this paper introduces the history of urban basic medical insurance after the founding of New China,then introduces the content of urban basic medical insurance system,and analyzes its possible impact on the labor market.It can be concluded that the old urban basic medical insurance system hinders the worker’s job turnover and improves the value of formal employment,seriously affecting the development of informal employment,which including adults and young people.After the implement of URBMI,the urban basic medical insurance system formed the characteristics of "double system","optional" and "voluntary insurance".Because of the lower and more flexible payment,it is more attractive to healthy people,so it will promote the development of informal employment.Chapter 5: the empirical chapter of this paper.In this chapter,based on the theoretical analysis and the reform of China’s medical insurance system,this paper empirically studies the impact of URBMI on the mobility of labor force between formal employment and informal employment.As the old urban basic medical insurance increases the value of formal employment,the reformed basic medical insurance may improve this informal tendency and promote informal employment.The result shows that current urban basic medical insurance will affect the mobility of labor force between formal employment and informal employment.Chapter 6: the empirical chapter of this paper.In this chapter,based on the theoretical analysis and the reform of China’s medical insurance system,this paper empirically studies the impact of URBMI on the labor participation of informal elderly workers.For the elderly with informal employment,medical insurance may reduce their labor participation by reducing their expected medical expenses.Through the empirical research this paper shows that the reform of urban basic medical insurance has no significant impact on the labor participation of the elderly in informal employment,so it will not have a statistical impact on urban informal employment.Chapter 7: the empirical chapter of this paper.In this chapter,based on the theoretical analysis and the reform of China’s medical insurance system,this paper empirically studies the impact of URBMI on the job choice of young adults.The implement of the URBMI will increase the value of the informal work,change the employment tendency and seriously affects young students’ job choices in employment.This paper shows that current urban basic medical insurance significantly affect young adults’ s when entering the labor market.Chapter 8: the conclusion and our suggestion.In this chapter,this paper summarizes the conclusions of whole study,and gives relevant suggestions.The innovation of this paper:Firstly,based on the basic theory of economics and the practice of medical insurance reform in China,this paper analyses the impact of urban basic medical insurance on informal employment in order to provide Chinese experience and evidence for the theory.With the continuous development of microeconomics,scholars in microeconomics,labor economics and health economics have put forward many theories about the impact of medical insurance on the labor market.However,these theories are only based on certain assumptions,which,like the hypothesis of "rational man" in economics,are not eternal truths.We need to observe the situation and rules of market operation to provide feedback and validation for theoretical analysis.Chinese medical insurance reform is a part of the world’s medical insurance reform,and it has its uniqueness and complexity.Based on the empirical evidence of China’s medical insurance reform practice,we can test whether the economic theory conforms to China’s market operation and rules,and provide empirical evidence for the world’s medical insurance reform.Secondly,through empirical testing of the impact of urban basic medical insurance on informal employment,this paper confirms some discussions about the impact of China’s medical insurance system on labor supply or labor market.Medical insurance is an important factor affecting labor supply.Our governments have attached great importance to the study of the impact of medical insurance on labor supply and labor market,including labor market structure and labor supply decision-making of micro-individuals.In the process of medical insurance reform in China,many scholars have discussed the impact of high welfare and high security on job turnover,job choice or labor participation.However,few papers use data to empirically test the impact of these academic discussions.This paper confirms the important impact of medical insurance on the labor market through research,and provides empirical evidence for the discussion of the impact of long-term medical insurance on the labor market.Finally,it supplements the literature on the socioeconomic effects of urban basic medical insurance.As a social and employment security function of medical insurance reform in China,people tend to pay more attention to issues of social equity such as financing and security treatment,or its impact on the utilization of medical services and health of insured persons,but social medical insurance also has its social and economic effects.The impact of basic medical insurance on the labor market is part of the social and economic effects of medical insurance.By studying the impact of urban basic medical insurance on informal employment,this paper supplements the relevant literature on the social and economic effects of urban basic medical insurance.