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

Author

Listed:
  • Li, Hongbin

    () (Stanford University)

  • Liu, Pak-Wai

    () (Chinese University of Hong Kong)

  • Zhang, Junsen

    () (Chinese University of Hong Kong)

  • Ma, Ning

    () (Johns Hopkins University)

Abstract

This paper estimates the returns to membership of the Chinese Communist Party using unique twins data we collected from China. Our OLS estimate shows that being a Party member increases earnings by 10%, but the within-twin-pair estimate becomes zero. One interpretation of these results is that the OLS Party premium is due to omitted ability and family background. This interpretation would suggest that Party members fare well not because of their special political status per se, but because of the superior ability that made them Party members. The estimates are also consistent with an alternative interpretation that Party membership not only has its own effect but also has an external effect on the sibling.

Suggested Citation

  • Li, Hongbin & Liu, Pak-Wai & Zhang, Junsen & Ma, Ning, 2006. "Economic Returns to Communist Party Membership: Evidence from Urban Chinese Twins," IZA Discussion Papers 2118, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp2118
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    References listed on IDEAS

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    1. Neumark, David, 1999. "Biases in twin estimates of the return to schooling," Economics of Education Review, Elsevier, vol. 18(2), pages 143-148, April.
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    6. Hongbin Li & Lingsheng Meng & Junsen Zhang, 2005. "Why Do Entrepreneurs Enter Politics?," Discussion Papers 00009, Chinese University of Hong Kong, Department of Economics.
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    More about this item

    Keywords

    twins; communist party membership; China;

    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 - Economic Systems - - Socialist Systems and Transition Economies - - - Political Economy

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