Wednesday, 20 February 2008

Economic Returns to Communist Party Membership

Sometimes economists do write interesting papers. This looks like a great one and another paper to add to the pile.

This paper has just come out in the Economic Journal (a top journal). It may be hard to get access to this paper. A friendly academic should be able to help. I have included the email addresses of the authors.

I tend to believe the results that seem entirely plausible. Yes, you earn 10% more if you are a memeber BUT it is those characteristics that made you a member that are important.

Party members fare well not because of their political status but because of the superior ability that made them Party members.


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

Economic Journal, Vol. 117, Issue 523, pp. 1504-1520, October 2007

HONGBIN LI, Chinese University of Hong Kong
Email: lhongbin@cuhk.edu.hk
PAK WAI LIU, Chinese University of Hong Kong
Email: pakwailiu@cuhk.edu.hk
JUNSEN ZHANG, Chinese University of Hong Kong
Email: jszhang@cuhk.edu.hk
NING MA, Chinese University of Hong Kong
Email: johnson80528@yahoo.com.cn

This article estimates the returns to membership of the Chinese Communist Party using unique twins data we collected from China. Our OLS estimate shows a Party premium of 10%, but the within-twin-pair estimate becomes zero. One interpretation is that the OLS premium is due to omitted ability and family background. This interpretation suggests that Party members fare well not because of their political status but because of the superior ability that made them Party members. The estimates are also consistent with another interpretation that Party membership not only has its own effect but also has an external effect on siblings.

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3 comments:

Bill said...

Nowadays, it could be the 10% economic advantage that gave them the membership.

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