The Wage Premium of Communist Party Membership: Evidence from China

Hongjian Wang, Plamen Nikolov and Kevin Acker
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Hongjian Wang: State University of New York
Kevin Acker: The Johns Hopkins University School of Advanced International Studies and The Hopkins-Nanjing Center

No 12874, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Social status and political connections may confer large economic benefits on an individual. Previous studies focused on China have examined the relationship between Communist Party membership and earnings and found a positive correlation. However, the correlation could be partly or totally spurious. Using data from three surveys spanning three decades, we estimate the causal effect of Chinese Communist Party membership on monthly earnings in China. We find that, on average, membership in the Communist Party of China increases monthly earnings and the wage premium has grown in recent years. We explore potential causes and discover evidence that improvements in social networks and social rank, acquisition of job-related qualifications, and greater life satisfaction likely play important roles in increased earnings.

Keywords: political status; wage premium; Communist Party; China (search for similar items in EconPapers)
JEL-codes: D31 J31 P2 (search for similar items in EconPapers)
Pages: 57 pages
Date: 2019-12
New Economics Papers: this item is included in nep-cna, nep-lma, nep-soc and nep-tra
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Published - published in: Pacific Economic Review, 2020, 25 (3), 309 - 338

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Related works:
Journal Article: Wage premium of Communist Party membership: Evidence from China (2020)
Working Paper: The Wage Premium of Communist Party Membership: Evidence from China (2020)
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