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The Economics of Communist Party Membership: The Curious Case of Rising Numbers and Wage Premium during China's Transition

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Author Info
Simon Appleton
John Knight
Lina Song
Qingjie Xia

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Abstract

As the Chinese Communist Party has loosened its grip in a more market-oriented economy, why have membership and the economic benefits of joining risen? We use three national household surveys over 11 years to answer this question for wages in urban China. Individual demand for Party membership is treated as an investment in 'political capital' that brings monetary rewards in terms of a wage premium that has risen in recent years. However, this does not explain why the wage premium is higher for the personal characteristics that reduce the probability of membership. Rationing with a scarcity value for members with those characteristics provides an explanation.

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Publisher Info
Article provided by Taylor and Francis Journals in its journal Journal of Development Studies.

Volume (Year): 45 (2009)
Issue (Month): 2 ()
Pages: 256-275
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Handle: RePEc:taf:jdevst:v:45:y:2009:i:2:p:256-275

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. John Knight & Lina Song, 2003. "Increasing urban wage inequality in China," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 11(4), pages 597-619, December. [Downloadable!] (restricted)
  2. Heckman, James J, 1979. "Sample Selection Bias as a Specification Error," Econometrica, Econometric Society, vol. 47(1), pages 153-61, January. [Downloadable!] (restricted)
  3. Appleton, Simon & Knight, John & Song, Lina & Xia, Qingjie, 2002. "Labor retrenchment in China: Determinants and consequences," China Economic Review, Elsevier, vol. 13(2-3), pages 252-275. [Downloadable!] (restricted)
  4. Ashenfelter, Orley & Krueger, Alan B, 1994. "Estimates of the Economic Returns to Schooling from a New Sample of Twins," American Economic Review, American Economic Association, vol. 84(5), pages 1157-73, December. [Downloadable!] (restricted)
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  5. Liu, Zhiqiang, 2003. "The Economic Impact and Determinants of Investment in Human and Political Capital in China," Economic Development and Cultural Change, University of Chicago Press, vol. 51(4), pages 823-49, July.
  6. Hongbin Li & PakWai Liu & Junsen Zhang & Ning Ma, 2007. "Economic Returns to Communist Party Membership: Evidence From Urban Chinese Twins," Economic Journal, Royal Economic Society, vol. 117(523), pages 1504-1520, October. [Downloadable!] (restricted)
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  7. Simon Appleton & John Knight & Lina Song & Qingjie Xia, 2004. "Contrasting paradigms: segmentation and competitiveness in the formation of the chinese labour market," Journal of Chinese Economic and Business Studies, Taylor and Francis Journals, vol. 2(3), pages 185-205, September. [Downloadable!] (restricted)
  8. Hongbin Li & Pak Wai Liu & Ning Ma & Junsen Zhang, 2005. "Economic Returns to Communist Party Membership: Evidence from Chinese Twins," Discussion Papers 00015, Chinese University of Hong Kong, Department of Economics. [Downloadable!]
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Gustafsson, Björn & Sai, Ding, 2008. "Rank, Income and Income Inequality in Urban China," IZA Discussion Papers 3843, Institute for the Study of Labor (IZA). [Downloadable!]
  2. Song, Lina & Appleton, Simon, 2008. "Life Satisfaction in Urban China: Components and Determinants," IZA Discussion Papers 3443, Institute for the Study of Labor (IZA). [Downloadable!]
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