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

Simon Appleton, Lina Song, John Knight and Qingjie Xia ()

MPRA Paper from University Library of Munich, Germany

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.

Keywords: China; Communist Party; labour market; economic transition; wages (search for similar items in EconPapers)
JEL-codes: J08 J31 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-lab, nep-pol and nep-soc
Date: 2006, Revised 2008-01
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3) Track citations by RSS feed

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Related works:
Journal Article: The Economics of Communist Party Membership: The Curious Case of Rising Numbers and Wage Premium during China's Transition (2009) Downloads
Working Paper: The Economics of Communist Party Membership: The Curious Case of Rising Numbers and Wage Premium during China’s Transition (2008) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:8345

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