Abstract:

Communist Party membership is often associated with higher incomes in socialist regimes because it is an important credential for obtaining state-sector jobs and cadre positions. During the first two decades of marketization in China, the income returns to Communist Party membership (the party premium) clearly persisted. However, recent studies have documented an insignificant party premium in post-2000 China. Considering the persistent role of the state in resource allocation, this phenomenon is puzzling and lacks clear interpretation. Drawing on the knowledge of collider conditioning, we hypothesize that this phenomenon stems from a negative ability bias generated by conditioning on endogenous job positions. Using the China General Social Survey 2008, we re-examine the post-2000 party premiums. The results support this hypothesis and demonstrate that this negative ability bias overwhelms the usual positive ability bias and any residual party premiums. Party premiums persist after 2000 and are reflected in positions where the negative ability bias is less influential.

Key words: Causal diagrams, collider variables, income returns, negative ability bias, political capital, China