Lawrence Today magazine, Summer 2004
Mark Frazier, assistant
professor of government and the Luce Assistant Professor of East Asian Political
Economy, has been awarded a $59,500
grant by the Fulbright
Scholar Program to conduct research on pension reform initiatives in China.
Beginning in October, Frazier will
spend six months in China investigating different strategies that local-government
officials are implementing to deal with the financial and political obstacles
created by recently enacted
pension reforms.
First established in 1951 under Mao Tse-Tung and covering a mere 20,000 retirees
who met all the necessary requirements at the time, China’s pension program
underwent its first major overhaul in 40 years in the early 1990s. The long-standing
practice of retired state workers receiving pensions from their place of employment
was reformed into a program whereby the cost of retirement benefits was shifted
from the government to individual employers and workers.
“Chinese officials are finding themselves caught between competing forces,” says
Frazier. “They are attempting to establish the country’s first
viable social safety net, while at the same time, they face pressure from international
organizations like the World Bank to reduce the
government’s provision of pension benefits by encouraging people to save
for their own retirements.”
Local governments are now facing the financial realities of collecting less
in payroll taxes than is necessary to cover the payments to current pension
recipients, much less future retirees, he says. In less than
15 years, the number of Chinese retirees eligible for pension benefits has
quadrupled, growing from 10 million in 1990 to 40 million today. The problem
is further compounded by the fact there are no pension laws in China, only
a series of regulations that create considerable latitude among provincial
and municipal authorities in how pensions are administered.
Working with the Shanghai Academy of Social Sciences, Frazier will focus
his research on four provincial capitals, including Beijing. Through interviews
with officials from the social-insurance and pension departments of the Ministry
of Labor and Social Security,
enterprise managers, and individual pensioners, as well as published government
documents, he will study the different strategies administrators are using
to manage pension regulations and whether pension recipients are
in fact receiving the benefits to which they are legally entitled.
“When any government makes changes to what it once promised as benefits
to retirees, it is a very risky political move. This is why Social Security
reform here
is considered the proverbial ‘third rail of American politics,’” Frazier
says. “In China, it is true that the
leadership doesn’t have to worry about a voter backlash, but the stakes
in pension reform are arguably higher. How the government handles the financial
tasks of supporting a rapidly growing elderly population will heavily influence
what the Chinese economy looks like in the future — and even what Chinese
people demand of their government.
“This is an exceptional and exciting opportunity to conduct research
at a crucial stage in China’s economic reforms,” Frazier adds. “I
owe a great deal of thanks to many colleagues at Lawrence who supported my
grant
application and who have made it possible for me carry out the research. I’m
looking forward to sharing the results with my classes and encouraging students
to pursue their own research abroad.”
Frazier, who speaks and reads Mandarin Chinese, joined the Lawrence government
department in 2001 in a new faculty position created under a grant from the
Henry Luce Foundation. He is the author of the 2002 book, The Making of
the Chinese Industrial Workplace: State, Revolution, and Labor Management, which
traces the origins of the “iron rice bowl” of comprehensive cradle-to-grave
benefits and lifetime employment in Chinese factories.
A visitor to China a dozen times in the past ten years, Frazier serves as
a senior advisor for the Seattle-based National Bureau of Asian Research.
He
earned his bachelor’s degree from Princeton University and his Ph.D.
in political science from the University of California, Berkeley.