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.
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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
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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," Journal of Development Studies, Taylor & 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)
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