Communist Party of China Membership and Wage Gaps Between Party Members and Non-members

Abstract

AbstractUsing survey data from the Chinese Household Income Project Survey of 2002 and 2013 and decomposition methods, this study investigates the influence of membership of the Communist Party of China (CPC) on wage levels. Three new findings emerge. First, the probability of joining a CPC organization is higher for a male worker, a well-educated worker, and a worker with parents who have CPC membership. Second, the wage premium of CPC membership persists in the 2000s. Based on the results for the OLS model, the range of the wage premium of CPC membership is from 7.6 to 37.4% for 2002 and from 4.4 to 31.8% for 2013. When the sample selection bias is addressed the range of wage premium of CPC membership is 7.5 to 8.5% for 2002 and it is not statistically significant in 2013. Third, based on the resulst from the Blinder-Oaxaca decomposition analysis, the explained component is the main factor that contributes from 55.9 to 66.2% (2002) and from 85.7 to 91.0 %(2013) to the wage gap between CPC and non-CPC members. It is indicated that as the economic transition advanced, the discrimination and unobservable factors that determine the probability of gaining CPC membership grew in influence and contributed even more to widen the wage gap.KeywordsCommunist Party of ChinaMembershipWage premiumWage gap