Abstract

Why do some Chinese local governments include informal workers in their welfare systems while others exclude them? This article argues that local officials attempt to balance multiple, conflicting, top-down career-evaluation criteria by developing different inclusion mechanisms. The central mandate to build an inclusive welfare regime incentivizes local officials to embrace welfare “outsiders”. However, other top-down policy goals and the locally defined citizenship system disincentivize the full integration of outsiders. Faced with this political dilemma, local officials have strategically incorporated different types of outsiders into their welfare regimes. Their strategies depend on local labor market structures—specifically, the extent to which informal workers overlap with nonlocal workers. This hypothesis is tested using an original data set derived from thirty-one Chinese provinces, covering the period between 2005 and 2015, as well as two rounds of national-level survey data. Findings suggest that recent Chinese welfare expansion has ironically consolidated, even exacerbated, regional inequality.