IDEAS home Printed from https://ideas.repec.org/a/taf/jdevst/v45y2009i2p256-275.html
   My bibliography  Save this article

The Economics of Communist Party Membership: The Curious Case of Rising Numbers and Wage Premium during China's Transition

Author

Listed:
  • 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
    as

    Download full text from publisher

    File URL: http://www.tandfonline.com/doi/abs/10.1080/00220380802264739
    Download Restriction: Access to full text is restricted to subscribers.

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. 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.
    2. 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.
    3. 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.
    4. 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.
    5. Heckman, James, 2013. "Sample selection bias as a specification error," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 31(3), pages 129-137.
    6. 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 823-849, July.
    7. 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 1157-1173, December.
    8. 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 873-892, August.
    9. 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 & Francis Journals, vol. 2(3), pages 185-205.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Asadullah, M. Niaz & Xiao, Saizi & Yeoh, Emile, 2018. "Subjective well-being in China, 2005–2010: The role of relative income, gender, and location," China Economic Review, Elsevier, vol. 48(C), pages 83-101.
    2. Suchuan Zhang, 2014. "Impact of Job Involvement on Organizational Citizenship Behaviors in China," Journal of Business Ethics, Springer, vol. 120(2), pages 165-174, March.
    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.
    19. 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.
    20. Blum, Matthias & de Bromhead, Alan, 2019. "Rise and fall in the Third Reich: Social advancement and Nazi membership," European Economic Review, Elsevier, vol. 120(C).
    21. Qunyong Wang & Zhongwu Li & Xueliang Feng, 2019. "Does the Happiness of Contemporary Women in China Depend on Their Husbands’ Achievements?," Journal of Family and Economic Issues, Springer, vol. 40(4), pages 710-728, December.
    22. Yao, Yang & Yueh, Linda, 2009. "Law, Finance, and Economic Growth in China: An Introduction," World Development, Elsevier, vol. 37(4), pages 753-762, April.
    23. Gustafsson, Björn Anders & Sai, Ding, 2008. "Rank, Income and Income Inequality in Urban China," IZA Discussion Papers 3843, Institute of Labor Economics (IZA).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. 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.
    2. Appleton, Simon & Song, Lina & Xia, Qingjie, 2005. "Has China crossed the river? The evolution of wage structure in urban China during reform and retrenchment," Journal of Comparative Economics, Elsevier, vol. 33(4), pages 644-663, December.
    3. Appleton, Simon & Song, Lina, 2008. "Life Satisfaction in Urban China: Components and Determinants," World Development, Elsevier, vol. 36(11), pages 2325-2340, November.
    4. 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.
    5. 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.
    6. Xinxin Ma, 2019. "The Impact of Membership of the Communist Party of China on Wages," Economics Bulletin, AccessEcon, vol. 39(4), pages 2839-2856.
    7. Hongbin Li & Mark Rosenzweig & Junsen Zhang, 2010. "Altruism, Favoritism, and Guilt in the Allocation of Family Resources: Sophie's Choice in Mao's Mass Send-Down Movement," Journal of Political Economy, University of Chicago Press, vol. 118(1), pages 1-38, February.
    8. Myck, Michal & Nicinska, Anna & Morawski, Leszek, 2009. "Count Your Hours: Returns to Education in Poland," IZA Discussion Papers 4332, Institute of Labor Economics (IZA).
    9. Heywood, John S. & Siebert, W. Stanley & Wei, Xiangdong, 2009. "Job Satisfaction and the Labor Market Institutions in Urban China," IZA Discussion Papers 4254, Institute of Labor Economics (IZA).
    10. Xavier Ramos Morilla & Josep Lluís Raymond Bara & Josep Oliver Alonso, 1999. "Not All University Degrees Yield the Same Return: Private and Social Returns to Higher Education for Males in Spain," Working Papers wpdea9904, Department of Applied Economics at Universitat Autonoma of Barcelona.
    11. Fleisher, Belton M. & Sabirianova, Klara & Wang, Xiaojun, 2005. "Returns to skills and the speed of reforms: Evidence from Central and Eastern Europe, China, and Russia," Journal of Comparative Economics, Elsevier, vol. 33(2), pages 351-370, June.
    12. Chi, Wei & Li, Bo, 2014. "Trends in China’s gender employment and pay gap: Estimating gender pay gaps with employment selection," Journal of Comparative Economics, Elsevier, vol. 42(3), pages 708-725.
    13. Guilhem Bascle, 2008. "Controlling for endogeneity with instrumental variables in strategic management research," Post-Print hal-00576795, HAL.
    14. Muhammad Nauman Malik & Masood Sarwar Awan, 2016. "Analysing Econometric Bias and Non-linearity in Returns to Education of Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 55(4), pages 837-851.
    15. 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.
    16. Saul D. Hoffman, 2015. "Teen Childbearing and Economics: A Short History of a 25-Year Research Love Affair," Societies, MDPI, Open Access Journal, vol. 5(3), pages 1-18, September.
    17. 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.
    18. Behrman, Jere R. & Xiong, Yanyan & Zhang, Junsen, 2015. "Cross-sectional schooling-health associations misrepresented causal schooling effects on adult health and health-related behaviors: Evidence from the Chinese Adults Twins Survey," Social Science & Medicine, Elsevier, vol. 127(C), pages 190-197.
    19. Hou, Benyufang & Liu, Hong & Wang, Sophie Xuefei, 2020. "Returns to military service in off-farm wage employment: Evidence from rural China," China Economic Review, Elsevier, vol. 59(C).
    20. Fleischer, Belton M. & Yang, Dennis T., 2003. "Labor laws and regulations in China," China Economic Review, Elsevier, vol. 14(4), pages 426-433.

    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

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:jdevst:v:45:y:2009:i:2:p:256-275. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Chris Longhurst). General contact details of provider: http://www.tandfonline.com/FJDS20 .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.