Membership benefits or selection effects? Why former Communist Party members do better in post-Soviet Russia

The Communist Party of the Soviet Union (CPSU) served as an important social stratification mechanism. With the collapse of the Soviet state and the transition from state socialism in Russia, the institutional basis for former CPSU members' advantages disappeared. Thus, if former members still enjoy higher earnings than nonmembers, their advantages must stem from their superior human capital, social capital, or the unmeasured attributes that helped them join the Party in the first place. Using the Russian component of the multinational survey, "Social Stratification in Eastern Europe after 1989: General Population Survey," I model the effects of Party membership on the personal incomes of Russian adults in summer 1993, 1.5 years after the Soviet collapse. OLS regressions indicate that former Party members enjoy an income advantage after the collapse of Communism, net of other variables. Endogenous switching regressions reveal that this advantage stems entirely from selection into the Parry on the basis of unobserved variables. Net of the selection effect, there is no residual return to Parry membership. The findings imply that institutional change in formerly Communist systems does not fully account for who gets ahead: some individuals can adapt to changed institutional contexts so as to Preserve their advantages. (C) 2000 Academic Press.