Reversal Of Status And Fortune:The Adjustment Of Market Mechanism For Human Resource Misallocation

With the data of CHIP2002 and regarding the time(1979) of the reform and opening-up policy as the institutional exogenous change time node, this article argues that the exogenous institutional changes lead to the difference of political status and the following difference of individual wealth before and after the reform and opening-up policy. The dependent variable is "member of party"and "Annual income" and the independent variable is "Chengfen" and "educational level".The empirical results show the reversal of status and fortune before and after the reform and opening-up policy. On the one hand, before the reform and opening-up policy, Chengfen affected the individual to achieving the political status presented by CCP membership, The’bad’ones (the landlords and rich peasants, middle peasant, small business owners and entrepreneurs)were discriminated in the planned economy. However,after the reform and opening-up policy, the"adverse selection" to join the party censorship was weaken.The bad ones were no longer significantly political discrimination. And the probability to join the party increased greatly and they improved their political status.This showed that there was a political status changes before and after the 1979.0n the other hand, with the reform and opening-up policyand the establishing of market economy system,the human capital played its role fully. Owing to the high personal ability endowment,the spring of "bad"ones promoted their economic status.Their income were much higher than the spring of the "good"ones and they got compensation to some extent.On the basis of the reversal of status and fortune in different chengfen,the article furtherly discuss the differences of human capital allocation before and after the reform and opening-up policy. We attributes the low efficiency of economic operation of the planned economy period to the human capital’s misallocation.And at the same time,we owe the miracle of China’s economic growth after the reform and open-up policy to the reallocation of human capital by the market system.