Abstract:

Based on data from "Evaluation on Chinese Urban and Rural Low-income Household Support System(2014)", this paper uses the event history analysis method to explore the duration of welfare (dibao) and factors affecting dibao exit in the urban area. The study finds that welfare recipients commonly stay in welfare for long-term,however, it is not because of the "negative time dependence" or declining work motivation as claimed by the "time dependency hypothesis". On the contrary, the longer recipients remain in welfare, the likelihood ofexit increases, indicating that low exit rate is not caused by low work motivation. Further analysis shows that the low-income population suffers from labor capital deficiency and lacks employment assistance service, the two main determining factors leading to long-term welfare dependency. Furthermore, off-book informal employment constitutes an important barrier to dibao exit, even thoughits impact has been declining over the time.
Several policy implications can be drawn from this study:Firstly, in tackling the issue of labor capital deficiency, a comprehensive growth-oriented welfare system should be developed; Secondly, the central government should increase its funding to ensure that local agencies have sufficient funds for employment assistance projects; Finally, the government should strengthen multi-sector information sharing mechanism and enhance the professionalization of means-tested eligibility to deal with off-book informal employment, and more importantly, change the Chinese employment structure by creating moreformal employment.

Key words: long-term benefit receipt, Dibao, event history analysis, social assistance, Dibao exit difficulty