Economic Returns to Chinese Communist Party Membership Open Access

Shen, Hewei (2013)

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This paper uses data from the 2003 Chinese General Social Survey to examine the economic return to Chinese Communist Party membership. China is currently under an economic transition from planned economy to socialist market economy and there is a debate about whether the economic return to the party membership will continue to exist under the new economy. Therefore, this paper employs OLS and Fix-Effect analysis to study the economic return to political capital under this transition economy in China. The Fixed-Effect model suggests that economic return to party membership is smaller in wealthier provinces rather poor provinces in China because of the entry of foreign invested and private firms in the labor market. In addition, the OLS models imply that party membership helps male members to increase their household income and helps them change their household registration classification from agricultural status to non-agricultural status in order to enjoy the social benefits that are provided exclusively to urban residents.

Table of Contents

Table of Contents

1. Introduction 1

2. Literature Review 2

3. Dataset 7

4. Benefits of Chinese Communist Party Membership 7

i. Geographical Difference 8

ii. Average Household income and Party Membership 12

iii. Instrumental Variable 14

iv. Change of Household Registration Classification 17

5. Conclusion 21 References 25 Appendix 28

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