Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/35151
Authors: 
Appleton, Simon
Knight, John
Song, Lina
Xia, Qingjie
Year of Publication: 
2008
Series/Report no.: 
IZA Discussion Papers 3454
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.
Subjects: 
China
Communist Party
labour market
economic transition
wages
JEL: 
J31
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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