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

28 Pages Posted: 10 May 2006

See all articles by Hongbin Li

Hongbin Li

Chinese University of Hong Kong - Department of Economics

Pak Wai Liu

Chinese University of Hong Kong - Department of Economics

Junsen Zhang

The Chinese University of Hong Kong (CUHK) - Department of Economics; IZA Institute of Labor Economics

Ning Ma

Chinese University of Hong Kong - Department of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: May 2006

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

JEL Classification: J31, O15, P26

Suggested Citation

Li, Hongbin and Liu, Pak Wai and Zhang, Junsen and Ma, Ning, Economic Returns to Communist Party Membership: Evidence from Urban Chinese Twins (May 2006). IZA Discussion Paper No. 2118. Available at SSRN: https://ssrn.com/abstract=901248

Hongbin Li

Chinese University of Hong Kong - Department of Economics ( email )

Shatin, N.T.
Hong Kong

Pak Wai Liu

Chinese University of Hong Kong - Department of Economics ( email )

Shatin, N.T.
Hong Kong

Junsen Zhang (Contact Author)

The Chinese University of Hong Kong (CUHK) - Department of Economics ( email )

Shatin, N.T.
Hong Kong
852-2609-8186 (Phone)
852-2603-5805 (Fax)

HOME PAGE: http://www.cuhk.edu.hk/eco/staff/jszhang/jzhang.htm

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Ning Ma

Chinese University of Hong Kong - Department of Economics ( email )

Shatin, N.T.
Hong Kong

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