An Analysis Of The Process Of Distribution Of Public Resources For Old Age Support: A Post-Danwei Perspective

Population aging is an important social issue in contemporary China. While it affects the general increase of the demand for public resources for old age support in the urban areas, it also affects the government efforts in searching for appropriate mechanism for public source distribution. There has been a change in the distributive mechanism for old age support resources from Danwei-based to social insurance-based programs promoted by various government policies in the last few years. However, this transformation does not lead to the replacement of Danwei-based distributive programs by the gradual development of social insurance programs. The problem is that the change of the ownership during the period of social transition either strengthens or weakens the distributive mechanism of Danwei, which results in increasing inequity in resource distribution among the urban aged population.The analysis of the process of resource distribution within Danwei identifies two common channels for resource allocation: public resource from the state and resource from the market, and access to these two channels depends on the functional nature of the Danwei. In addition to allocating resources from the state, the powerful Danweis with the function of administration or facilitation acquire the opportunity to allocate resources from the market during the reform. The ability to accumulate resources from both the state and the market enables these Dan-weis to function not only as distributive media between public resources and individual beneficiary, but also function as collectors of additional resources that can be distributed among its employees and retirees. In contrast, the weak Danweis with the productive function have little access to the resources for employee welfare from the state. Limited public resources for retirees from these Danweis are distributed through social insurance institutions instead of through Danweis. The built-in unequal distribution of retirement benefits, in terms of pension, health care, and lack of additional resources for subsidy has led to a vulnerable group of elderly retired from these Danweis.The findings of this study reveal that the level of public resource benefit received by the urban elderly is closely related to the work units in which they had been employed before retirement. Except for the property right relation between the Danwei and the state, the degree of reliability of the Danwei on the state financial support and the ability of the Danwei to compete in the market by taking advantage of the existing policies are important factors that affect the aged people in obtaining public resources for support.