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

Hongbin Li (), Pak-Wai Liu (), Junsen Zhang and Ning Ma ()
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Pak-Wai Liu: Chinese University of Hong Kong

No 2118, IZA Discussion Papers from Institute of Labor Economics (IZA)

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.

Keywords: twins; communist party membership; China (search for similar items in EconPapers)
JEL-codes: J31 O15 P26 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cna, nep-sea and nep-tra
Date: 2006-05
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