Three essays on Chinese economy

In Chapter 1 I estimate economic returns to communist party membership in China. To overcome the problem of underreporting income, I propose a new method to impute family income based on the Engel rule. Using data from China Household Income Project, I find that for party member families the underreported family incomes, the difference between the imputed and reported income, are 27% and 17% of the reported incomes in 1995 and 2002 respectively, and that non-party member families do not underreport household incomes, consistent with the assumption. The estimated rates of return to party membership based on the imputed income are two-and-a-half to four times of those based on the reported income and are also substantially larger than the previous estimates reported in the economics literature. In Chapter 2 I examine the impact of the New Rural Pension Scheme (NRPS) on the private transfer behavior of non-coresident adult children toward their elderly parents in rural China. Using data from the China Health and Retirement Longitudinal Survey and the regression discontinuity design and difference in difference method (RD-DiD), I find no evidence that pension payment from the NRPS program significantly crowds out economic support from adult children to their elderly parents. The heterogeneous effects at different income percentiles indicate that pension payment significantly increases the probability of receiving gross transfers, the net amount of transfers as well as the likelihood of positive net transfer for those elderlies with low income. The empirical findings suggest that the NRPS program is an effective tool for general poverty reduction and social protection for the targeted elderly population. In Chapter 3 I examine how the commute time affects labor supply. The theoretical model I construct does not offer clear-cut predictions. Using data from the China Health and Nutrition Survey, I find that commute time has no effect on daily labor supply but has a negative effect on work days per week and weekly labor supply. These findings are different from those for Germany and Spain, and are potentially related to unique features of the labor supply and the labor market in China. Further, the effect of commute time on workdays per week is stronger for workers who change jobs and for high skill occupation workers who do not change jobs. The effects of commute time on labor supply do not differ between males and females