Social insurance with Chinese characteristics: The role of communist party in private firms

- We include Communist Party of China in the analysis of social insurance in China.
- We find that CPC and union are complements in providing better insurance coverage.
- The Party-union complementarity effect is strong and persistent.
- Analysis of unionization in China can not ignore the impacts of the CPC.

This paper studies the inter-correlation among the Communist Party of China (CPC), unionization, and social insurance in a sample of Chinese private firms. We find that both Party branch and unionization are positively associated with insurance coverage. We further present evidence that Party branch and unionization are complements in association with better coverage of social insurance. When the Party-union complementarity is taken into account, Party branch alone is no longer positively associated with social insurance, while the correlation between unionization and insurance declines significantly. Our results suggest that the role of the CPC is overlooked in the literature on labor relations in China.