Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/215270 
Year of Publication: 
2019
Series/Report no.: 
IZA Discussion Papers No. 12874
Publisher: 
Institute of Labor Economics (IZA), Bonn
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.
Subjects: 
wage premium
political status
China
Communist Party
JEL: 
D31
J31
P2
Document Type: 
Working Paper

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