The economics of Communist Party membership - The Curious case of rising numbers and wage premium during China’s transition
Why is it that, as the Chinese Communist Party has loosened its grip, abandoned its core beliefs, and marketized the economy, its membership has risen markedly along with the economic benefits of joining? We use three national household surveys, spanning eleven years, to answer this question with respect to labour market rewards in urban China. We conceptualize individual demand for Party membership as an investment in “political capital” that brings monetary rewards in terms of higher wages. This wage premium has risen with the growing wage differentials associated with the emergence of a labour market and the continuing value of political status in the semi-marketized transitional economy. However, a demand-side explanation does not explain the fact that the wage premium is higher for the personal characteristics that reduce the probability of membership. We develop an explanation in terms of a rationing of places and a scarcity value for members with those characteristics.
|Date of creation:||2006|
|Date of revision:||Jan 2008|
|Contact details of provider:|| Postal: |
Web page: http://mpra.ub.uni-muenchen.de
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- 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 823-49, July.
- 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.
- Heckman, James J, 1979.
"Sample Selection Bias as a Specification Error,"
Econometric Society, vol. 47(1), pages 153-61, January.
- 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.
- 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 1157-73, December.
- Alan Krueger & Orley Ashenfelter, 1992. "Estimates of the Economic Return to Schooling from a New Sample of Twins," NBER Working Papers 4143, National Bureau of Economic Research, Inc.
- Orley Ashenfelter & Alan Krueger, 1992. "Estimates of the Economic Return to Schooling from a New Sample of Twins," Working Papers 683, Princeton University, Department of Economics, Industrial Relations Section..
- 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.
- 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 873-92, August.
- 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).
- 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.
- 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.
When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:8345. 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: (Ekkehart Schlicht)
If references are entirely missing, you can add them using this form.