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On the evolution of the wage premium for party membership in China

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  • Amighini, Alessia
  • Fang, Weidi
  • Zagler, Martin

Abstract

We analyze the evolution of explained and unexplained differences in wages between members of the Communist Party of China and non-members across more than two decades (1995–2018). We apply the Oaxaca-Blinder decomposition method to disentangle the contribution to the wage gap of different levels of human capital from discrimination against non-members. We also run quantile regressions to estimate the slope of the wage premium functions applying the Machado-Mata decomposition. Our results show that the party wage premium has decreased over time, but it is still high. Our novel finding is that a positive discrimination for members of the Chinese communist party (not justified by characteristics) started in 2013 and dominates in 2018. Whilst before the party has recruited elites and paid them fairly for their qualifications, party members are now positively discriminated, and this may attract opportunists more than elites.

Suggested Citation

  • Amighini, Alessia & Fang, Weidi & Zagler, Martin, 2025. "On the evolution of the wage premium for party membership in China," World Development, Elsevier, vol. 188(C).
    • Handle: RePEc:eee:wdevel:v:188:y:2025:i:c:s0305750x24003802
    DOI: 10.1016/j.worlddev.2024.106909
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    More about this item

    Keywords

    Communist Party of China (CPC); wage premium for CPC membership; Decomposition methods; China;
    All these keywords.

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • P21 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Planning, Coordination, and Reform
    • J32 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions
    • J43 - Labor and Demographic Economics - - Particular Labor Markets - - - Agricultural Labor Markets
    • J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing

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