Communist Party branch and labour rights: Evidence from Chinese entrepreneurs

Abstract

This study examines the causal effects of having a Chinese Communist Party (CCP) branch on the coverage of labour contracts and social insurance among employees in private enterprises. Using a regression discontinuity design in a quasi-experimental framework, we find that having a Party branch has a significant effect on the coverage rates of individual and collective labour contracts as well as five social insurance schemes. The positive effect of having a Party branch on contract and social insurance coverage are weaker when the enterprise also has a trade union and staff representative congress, when the entrepreneur is a member of the CCP or the People's Congress or Political Consultative Conference and in provinces in which government intervention is lower or the private sector more developed. We find that firm-level mean wages and spending on training and occupational health and safety mediate the relationship between having a Party branch and labour rights.