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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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  • Simon Appleton
  • John Knight
  • Lina Song
  • Qingjie Xia

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.

Suggested Citation

  • 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.
  • Handle: RePEc:taf:jdevst:v:45:y:2009:i:2:p:256-275
    DOI: 10.1080/00220380802264739
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    References listed on IDEAS

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    Cited by:

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    3. McLaughlin, Joanne Song, 2017. "Does Communist party membership pay? Estimating the economic returns to party membership in the labor market in China," Journal of Comparative Economics, Elsevier, vol. 45(4), pages 963-983.
    4. Xinxin Ma, 2019. "The Impact of Membership of the Communist Party of China on Wages," Economics Bulletin, AccessEcon, vol. 39(4), pages 2839-2856.
    5. Ma, Xinxin, 2018. "Labor market segmentation by industry sectors and wage gaps between migrants and local urban residents in urban China," China Economic Review, Elsevier, vol. 47(C), pages 96-115.
    6. Appleton, Simon & Song, Lina & Xia, Qingjie, 2014. "Understanding Urban Wage Inequality in China 1988–2008: Evidence from Quantile Analysis," World Development, Elsevier, vol. 62(C), pages 1-13.
    7. Yamamura, Eiji & Smyth, Russell & Zhang, Yan, 2015. "Decomposing the effect of height on income in China: The role of market and political channels," Economics & Human Biology, Elsevier, vol. 19(C), pages 62-74.
    8. Chadwick Curtis, 2016. "Economic Reforms and the Evolution of China's Total Factor Productivity," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 21, pages 225-245, July.
    9. Jane Golley & Yixiao Zhou & Meiyan Wang, 2019. "Inequality of Opportunity in China's Labor Earnings: The Gender Dimension," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 27(1), pages 28-50, January.
    10. Plamen Nikolov & Hongjian Wang & Kevin Acker, 2020. "Wage premium of Communist Party membership: Evidence from China," Pacific Economic Review, Wiley Blackwell, vol. 25(3), pages 309-338, August.
    11. Appleton, Simon & Song, Lina, 2008. "Life Satisfaction in Urban China: Components and Determinants," World Development, Elsevier, vol. 36(11), pages 2325-2340, November.
    12. Markussen, Thomas & Ngo, Quang-Thanh, 2019. "Economic and non-economic returns to communist party membership in Vietnam," World Development, Elsevier, vol. 122(C), pages 370-384.
    13. Yu, Ang & Tang, Chengzuo, 2018. "Mobilized to Take a Vanguard Role: Communist Party Members’ Participation in the Community Building Campaign," SocArXiv 6khja, Center for Open Science.
    14. Matthias Blum & Alan de Bromhead, 2017. "Rise and Fall in the Third Reich: Social Mobility and Nazi Membership," Economics Working Papers 17-01, Queen's Management School, Queen's University Belfast.
    15. Matthew Cole & Robert Elliott & Jing Zhang, 2009. "Corruption, Governance and FDI Location in China: A Province-Level Analysis," Journal of Development Studies, Taylor & Francis Journals, vol. 45(9), pages 1494-1512.
    16. Hongwei Xu & Yu Xie, 2017. "Socioeconomic Inequalities in Health in China: A Reassessment with Data from the 2010–2012 China Family Panel Studies," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 132(1), pages 219-239, May.
    17. Bohacek, Radim & Myck, Michal, 2017. "Economic Consequences of Political Persecution," IZA Discussion Papers 11136, Institute of Labor Economics (IZA).
    18. Yuanyuan Ma & Patrick Paul Walsh & Liming Wang, 2017. "Earnings Premium in State Jobs Across Urban China," Asian Economic Papers, MIT Press, vol. 16(2), pages 167-184, Summer.
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    23. Gustafsson, Björn Anders & Sai, Ding, 2008. "Rank, Income and Income Inequality in Urban China," IZA Discussion Papers 3843, Institute of Labor Economics (IZA).

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    More about this item

    JEL classification:

    • 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

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