Earnings Premium in State Jobs Across Urban China
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Using the Chinese Household Income Project (CHIP) data, we find a 30 percent raw differential in earnings in favor of state workers in 2002. We examine the degree to which this differential is a pure premium by using a Heckman two-step selection model, where we instrument workers’ preference for state jobs with family political connections, among other factors. We find that 22 percent of the observed earnings differential is a pure premium to a worker in a state job in urban China. In the absence of a political transition in China, state jobs remained the privileged constituency in a dual-track transition that attracted the best politically connected workers in urban China and offered them a pure earnings premium.
2021 ◽
Vol 20
(6)
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pp. 1701-1715
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2014 ◽
Vol 59
(01)
◽
pp. 1450005
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2003 ◽
Vol 35
(4)
◽
pp. 591-614
◽
2022 ◽
Keyword(s):
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