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Economic Returns to Communist Party Membership: Evidence From Urban Chinese Twins

Author

Listed:
  • Hongbin Li
  • PakWai Liu
  • Junsen Zhang
  • Ning Ma

Abstract

This article estimates the returns to membership of the Chinese Communist Party using unique twins data we collected from China. Our OLS estimate shows a Party premium of 10%, but the within-twin-pair estimate becomes zero. One interpretation is that the OLS premium is due to omitted ability and family background. This interpretation suggests that Party members fare well not because of their political status but because of the superior ability that made them Party members. The estimates are also consistent with another interpretation that Party membership not only has its own effect but also has an external effect on siblings. Copyright 2007 The Author(s). Journal compilation Royal Economic Society 2007.

Suggested Citation

  • 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.
    • Handle: RePEc:ecj:econjl:v:117:y:2007:i:523:p:1504-1520
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    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • P26 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Property Rights

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