About 840,000 migrant workers had quit Shanghai's social security system as of Nov 12 to return home or work in other cities, official figures show.

The figure represents an increase of 4.4 percent compared to the same period last year.

Du Bin, deputy director of the Shenzhen social security fund management bureau, told a press conference yesterday it was a "reasonable increase" when taking into account the current economic downturn.

Since China's social security system has yet to be unified, many migrants terminated their membership so that they could withdraw their funds before leaving Shenzhen.

They withdrew 1.43 billion yuan ($21 million) from January to last month, down 16 percent from 1.7 billion yuan a year ago, official figures show.

"Those leaving were young migrants wishing to go back to farming or to work in other cities. They preferred to withdraw their funds, knowing all benefits would cease too," Du said.

The migrants were mainly employed in the labor-intensive industries, he said.

"Our research, however, shows that fewer people engaged in hi-tech, finance and the service industry chose to quit the social security system this year than last year," Du said.

According to local policy, migrant workers without permanent residency status will be afforded the same treatment as other residents if they pay social security for at least 15 years and be entitled to a monthly retirement allowance.

The press conference yesterday came a day after the local labor department denied a rumor that a large number of migrant workers had left the city.

A total of 923 companies have closed so far this year, but laid-off workers have still been able to find new jobs, Guan Lingen, chief of the local labor and social security administration, said.

The city's labor demand for the third quarter stood at 1.7 million, up 72,000 from the previous quarter with 413,000 jobs to fill.

The economic crisis has had a bigger impact on the neighboring city of Dongguan.

About 117 companies closed in September and October without paying about 20,000 workers, local media said.

The city's labor authority said it will strengthen supervision of companies to ensure they do not default on wages.