The Economics of Communist Party Membership: The Curious Case of Rising Numbers and Wage Premium during China’s Transition
AbstractWhy is it that, as the Chinese Communist Party has loosened its grip, abandoned its core beliefs, and marketized the economy, its membership has risen markedly along with the economic benefits of joining? We use three national household surveys, spanning eleven years, to answer this question with respect to labour market rewards in urban China. We conceptualize individual demand for Party membership as an investment in “political capital” that brings monetary rewards in terms of higher wages. This wage premium has risen with the growing wage differentials associated with the emergence of a labour market and the continuing value of political status in the semi-marketized transitional economy. However, a demand-side explanation does not explain the fact that the wage premium is higher for the personal characteristics that reduce the probability of membership. We develop an explanation in terms of a rationing of places and a scarcity value for members with those characteristics.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 3454.
Length: 32 pages
Date of creation: Apr 2008
Date of revision:
Publication status: published in: Journal of Development Studies, 2009, 45, (2), 256-275
Contact details of provider:
Postal: IZA, P.O. Box 7240, D-53072 Bonn, Germany
Phone: +49 228 3894 223
Fax: +49 228 3894 180
Web page: http://www.iza.org
Postal: IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany
Other versions of this item:
- Simon Appleton & John Knight & Lina Song & Qingjie Xia, 2009. "The Economics of Communist Party Membership: The Curious Case of Rising Numbers and Wage Premium during China's Transition," The Journal of Development Studies, Taylor and Francis Journals, vol. 45(2), pages 256-275.
- Appleton, Simon & Song, Lina & Knight, John & Xia, Qingjie, 2006. "The economics of Communist Party membership - The Curious case of rising numbers and wage premium during China’s transition," MPRA Paper 8345, University Library of Munich, Germany, revised Jan 2008.
- J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
- J40 - Labor and Demographic Economics - - Particular Labor Markets - - - General
- J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing
- P20 - Economic Systems - - Socialist Systems and Transition Economies - - - General
- P30 - Economic Systems - - Socialist Institutions and Their Transitions - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-04-29 (All new papers)
- NEP-CNA-2008-04-29 (China)
- NEP-DEV-2008-04-29 (Development)
- NEP-TRA-2008-04-29 (Transition Economics)
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.:
- 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.
- 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.
- Alan Krueger & Orley Ashenfelter, 1992. "Estimates of the Economic Return to Schooling from a New Sample of Twins," NBER Working Papers 4143, National Bureau of Economic Research, Inc.
- Groves, Theodore & Yongmiao Hong & John McMillan & Barry Naughton, 1995. "China's Evolving Managerial Labor Market," Journal of Political Economy, University of Chicago Press, vol. 103(4), pages 873-92, August.
- Heckman, James, 2013.
"Sample selection bias as a specification error,"
Publishing House "SINERGIA PRESS", vol. 31(3), pages 129-137.
- 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.
- 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.
- Li, Hongbin & Liu, Pak-Wai & Zhang, Junsen & Ma, Ning, 2006.
"Economic Returns to Communist Party Membership: Evidence from Urban Chinese Twins,"
IZA Discussion Papers
2118, Institute for the Study of Labor (IZA).
- 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.
- 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.
- 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.
- Gustafsson, Björn Anders & Sai, Ding, 2008. "Rank, Income and Income Inequality in Urban China," IZA Discussion Papers 3843, Institute for the Study of Labor (IZA).
- Song, Lina & Appleton, Simon, 2008.
"Life Satisfaction in Urban China: Components and Determinants,"
IZA Discussion Papers
3443, Institute for the Study of Labor (IZA).
- Appleton, Simon & Song, Lina, 2008. "Life Satisfaction in Urban China: Components and Determinants," World Development, Elsevier, vol. 36(11), pages 2325-2340, November.
- Song, Lina & Appleton, Simon, 2008. "Life Satisfaction in Urban China: Components and Determinants," MPRA Paper 8347, University Library of Munich, Germany.
- Yao, Yang & Yueh, Linda, 2009. "Law, Finance, and Economic Growth in China: An Introduction," World Development, Elsevier, vol. 37(4), pages 753-762, April.
- Appleton, Simon & Song, Lina & Xia, Qingjie, 2012. "Understanding Urban Wage Inequality in China 1988-2008: Evidence from Quantile Analysis," IZA Discussion Papers 7101, Institute for the Study of Labor (IZA).
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Mark Fallak).
If references are entirely missing, you can add them using this form.