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The economics of Communist Party membership - The Curious case of rising numbers and wage premium during China’s transition

Author

Listed:
  • Appleton, Simon
  • Song, Lina
  • Knight, John
  • Xia, Qingjie

Abstract

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.

Suggested Citation

  • Appleton, Simon & Song, Lina & Knight, John & Xia, Qingjie, 2006. "The economics of Communist Party membership - The Curious case of rising numbers and wage premium during China’s transition," MPRA Paper 8345, University Library of Munich, Germany, revised Jan 2008.
  • Handle: RePEc:pra:mprapa:8345
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    References listed on IDEAS

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    Cited by:

    1. 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.
    2. Xinxin Ma, 2019. "The Impact of Membership of the Communist Party of China on Wages," Economics Bulletin, AccessEcon, vol. 39(4), pages 2839-2856.
    3. 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.
    4. 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.
    5. 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.
    6. 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.
    7. Tingqiu Cao & Xianhang Qian, 2021. "Political Capital and Household Income: Evidence from Twenty-Four Transition Countries," Journal of Family and Economic Issues, Springer, vol. 42(1), pages 151-165, March.
    8. 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.
    9. 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.
    10. 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.
    11. 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.
    12. 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).
    13. 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.
    14. 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.
    15. 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.
    16. 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.
    17. 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.
    18. 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.
    19. Appleton, Simon & Song, Lina, 2008. "Life Satisfaction in Urban China: Components and Determinants," World Development, Elsevier, vol. 36(11), pages 2325-2340, November.
    20. 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.
    21. Bohacek, Radim & Myck, Michal, 2017. "Economic Consequences of Political Persecution," IZA Discussion Papers 11136, Institute of Labor Economics (IZA).
    22. 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.
    23. Yao, Yang & Yueh, Linda, 2009. "Law, Finance, and Economic Growth in China: An Introduction," World Development, Elsevier, vol. 37(4), pages 753-762, April.
    24. 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

    Keywords

    China; Communist Party; labour market; economic transition; wages;
    All these keywords.

    JEL classification:

    • J08 - Labor and Demographic Economics - - General - - - Labor Economics Policies
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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