Economic Returns to Communist Party Membership: Evidence From Urban Chinese Twins*


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     We thank Simon Fan, Lok-Sang Ho, Justin Yifu Lin, Ping Lin, Jorn-Steffen Pischke (editor), Mark Rosenzweig, Yasuyuki Sawada, Yasuyuki Todo, Xiangdong Wei, two anonymous referees and seminar and conference participants for very helpful comments and suggestions. We also thank Mark Rosenzweig for his generous help in the survey work. The work described in this article was substantially supported by a grant from the Research Grants Council of the Hong Kong Special Administative Region (Project no. CUHK4358/01H). The usual disclaimer applies.


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.