News Center



Home News Center News

Prof. Zhang Dandan: Pandemic, Unemployment, and Social Aid

May 23-2022   



On May 16, the National Bureau of Statistics revealed that the surveyed urban jobless rate was 6.1% in April, while that of workers with rural residence permits was 6.6%, and that of the 16-24 age group, 18.2%.

 

Since the outbreak of the pandemic, China’s labor market has experienced dramatic fluctuations, said Zhang Dandan, NSD Associate Professor of Economics, in a commentary. The revelations about the unemployment rates of migrant workers and youngsters show that national authorities are concerned about overall employment situation, particular that of certain groups, as a new round of Omicron-variant pandemic flares up, she said.

 

She cited statistics compiled by Prof. Lu Feng, also of the NSD, which demonstrated that the youth jobless rates in the US and Europe have been on the decline, now reaching levels lower than China’s figure. To understand the underlying reasons related to social welfare system and beyond, Prof. Zhang utilized 2020 data to make institutional comparisons across countries.

 

The intensity of pandemic control measures tends to reflect countries’ weighing of economy and public health. The US and Europe have adopted relatively loose measures that have led to continuous spread or outbreaks of the pandemic; consequently, their economies took a hard hit in 2020, with the American GDP down by 5.9% - the worst since 1946, and the European one tumbling by 9.9% - the largest decrease since 1709. In comparison, China has adopted the strictest measures; its GDP grew by 2.3% in 2020.

 

Yet the performance of China’s labor market hasn’t been as encouraging. Research jointly conducted by the NSD and a Tencent-affiliated think-tank showed that in June 2020 migrant workers and young people of 16 to 24 years old recorded jobless rates of 13.3% and 31.9% respectively, making them the most severely impacted and most vulnerable groups in the labor force. For the whole year, 12% of workers reported experiencing unemployment.

 

How come the US and Europe didn’t see an obvious increase in unemployment despite shocks to their economies, but China wasn’t able to reduce joblessness even as its economy fared rather well? Prof. Zhang said that it might be due to the former’s focus on providing social aid directly to individuals and the latter’s focus on supporting market entities, such as SMEs, which are the main job providers. For example, with its CoronaVirus Job Retention Scheme, the UK government paid for the salaries of furloughed workers; in addition, it expanded unemployment coverage. The US followed a similar path.

 

Research by Prof. Zhang and her colleagues shows that among the Chinese workers who lost jobs, 13% received allowances from their companies, but the remaining 87% didn’t have any incomes: they mainly relied on their families (47.5%) or savings (38.1%); only 7.6% could turn to social security. In terms of social assistance, 88.2% received none, 7.7% were covered by unemployment insurance, 1.4% had access to minimum livelihood aid, 1.2% managed to get petty loans, and 0.2% underwent occupational training. The figures pointed to a lack of inclusive social aid for individuals during the pandemic, said Prof. Zhang.

 

Furlough schemes might also have positive impact on the mental health of workers, according to British research findings. Prof. Zhang found that insufficient employment caused a considerable decline of mental health among Chinese workers. To some extent, social aid for individuals might generate a higher sense of satisfaction for workers and promoting overall social welfare level.

 

Furlough schemes are not without their problems, and pandemic control measures must be tuned to local needs, said Prof. Zhang. She suggested providing direct aid to workers in long-term unemployment and families plunged into poverty by the pandemic. In recognition of Omicron’s more potent propagation and less deadly impact on health, and based on the experiences of different countries in dealing with the Omicron variant, China should dynamically adjust and optimize policies for ensuring people’s livelihood and stabilizing economic growth with an eye on the future, advised Prof. Zhang.

Prof. Zhang Dandan: Pandemic, Unemployment, and Social Aid

May 23-2022   



On May 16, the National Bureau of Statistics revealed that the surveyed urban jobless rate was 6.1% in April, while that of workers with rural residence permits was 6.6%, and that of the 16-24 age group, 18.2%.

 

Since the outbreak of the pandemic, China’s labor market has experienced dramatic fluctuations, said Zhang Dandan, NSD Associate Professor of Economics, in a commentary. The revelations about the unemployment rates of migrant workers and youngsters show that national authorities are concerned about overall employment situation, particular that of certain groups, as a new round of Omicron-variant pandemic flares up, she said.

 

She cited statistics compiled by Prof. Lu Feng, also of the NSD, which demonstrated that the youth jobless rates in the US and Europe have been on the decline, now reaching levels lower than China’s figure. To understand the underlying reasons related to social welfare system and beyond, Prof. Zhang utilized 2020 data to make institutional comparisons across countries.

 

The intensity of pandemic control measures tends to reflect countries’ weighing of economy and public health. The US and Europe have adopted relatively loose measures that have led to continuous spread or outbreaks of the pandemic; consequently, their economies took a hard hit in 2020, with the American GDP down by 5.9% - the worst since 1946, and the European one tumbling by 9.9% - the largest decrease since 1709. In comparison, China has adopted the strictest measures; its GDP grew by 2.3% in 2020.

 

Yet the performance of China’s labor market hasn’t been as encouraging. Research jointly conducted by the NSD and a Tencent-affiliated think-tank showed that in June 2020 migrant workers and young people of 16 to 24 years old recorded jobless rates of 13.3% and 31.9% respectively, making them the most severely impacted and most vulnerable groups in the labor force. For the whole year, 12% of workers reported experiencing unemployment.

 

How come the US and Europe didn’t see an obvious increase in unemployment despite shocks to their economies, but China wasn’t able to reduce joblessness even as its economy fared rather well? Prof. Zhang said that it might be due to the former’s focus on providing social aid directly to individuals and the latter’s focus on supporting market entities, such as SMEs, which are the main job providers. For example, with its CoronaVirus Job Retention Scheme, the UK government paid for the salaries of furloughed workers; in addition, it expanded unemployment coverage. The US followed a similar path.

 

Research by Prof. Zhang and her colleagues shows that among the Chinese workers who lost jobs, 13% received allowances from their companies, but the remaining 87% didn’t have any incomes: they mainly relied on their families (47.5%) or savings (38.1%); only 7.6% could turn to social security. In terms of social assistance, 88.2% received none, 7.7% were covered by unemployment insurance, 1.4% had access to minimum livelihood aid, 1.2% managed to get petty loans, and 0.2% underwent occupational training. The figures pointed to a lack of inclusive social aid for individuals during the pandemic, said Prof. Zhang.

 

Furlough schemes might also have positive impact on the mental health of workers, according to British research findings. Prof. Zhang found that insufficient employment caused a considerable decline of mental health among Chinese workers. To some extent, social aid for individuals might generate a higher sense of satisfaction for workers and promoting overall social welfare level.

 

Furlough schemes are not without their problems, and pandemic control measures must be tuned to local needs, said Prof. Zhang. She suggested providing direct aid to workers in long-term unemployment and families plunged into poverty by the pandemic. In recognition of Omicron’s more potent propagation and less deadly impact on health, and based on the experiences of different countries in dealing with the Omicron variant, China should dynamically adjust and optimize policies for ensuring people’s livelihood and stabilizing economic growth with an eye on the future, advised Prof. Zhang.