Negative Ability Bias and Collider Conditioning: Explaining the Vanishing Communist Party Premium in Transitional China

• In Event: 585 - Regular Session. Social Stratification and Inequality: Casual Inference

Abstract

In the estimation of income returns to job credentials, a widely-overlooked negative ability bias often arises when a model conditions on job positions (“colliders”). This paper gives an illustration of the bias from the estimation of Party premiums (namely, income returns to political capital associated with Chinese Communist Party membership) in transitional China. Communist Party membership is an important credential for obtaining state-sector jobs and cadre positions. However, recent studies have documented a vanishing party effect on income amid deepening marketization. Contrary to prevailing interpretations, we argue that this phenomenon stems from negative ability biases generated by conditioning on an intermediate collider variable. Drawing on six waves of Chinese Household Income Project (CHIP) and Chinese General Social Survey (CGSS) from 1988 through 2008, we re-examine the trend in Party premiums. The new evidence, based on two crucial tests, is consistent with the hypothesis that a negative ability bias has been at play for some time and recently overwhelmed the usual positive ability bias on Party premiums. After minimizing all ability biases, Party premiums appear to have increased except for college educated workers.

Authors

• Ling Zhu, Stanford University

• Tony Tam, Chinese University of Hong Kong