How are they paid? A study of civil service pay in China

Abstract

The importance of pay in developing a professional, effective, and honest civil service is widely recognized. The World Bank and OECD have made uninterrupted efforts to encourage many developing countries to carry out pay reform. This study provides useful information for researchers and practitioners to compare civil service pay reform between China and other developing countries. It assesses the level of civil service pay by comparing it with pay in other sectors in China, using updated and credible data recently made available. It clarifies several points in the debate over civil service pay in China and provides new perspectives on the issue of whether the civil service pay in China is high or low. The analysis and findings in this study will be of interest to researchers and practitioners beyond China because the Chinese experience with civil service pay reform has important points in common with similar reforms elsewhere. For example, the Chinese phenomenon of large, non-wage, largely unreported and unofficial, civil service pay in China resembles practices in developing nations such as Vietnam, Egypt, Tanzania, Zambia, and Uganda. Nonetheless, to the extent that pay reform is driven by internal circumstances, strategies and objectives are likely to differ even though the basic problems of wage disparities, anti-corruption, and low civil service performance are similar. Given its economic importance and valuable reform experiences, China may provide a model for reforms elsewhere. This study also provides a benchmark for future research and cautions researchers to view official pay scales potentially as serious understatements of actual remuneration. Points for practitioners Many developing and transitional countries have attempted to reform their pay systems, with mixed results. This study provides useful information for researchers and practitioners to compare civil service pay reform between China and other countries. China’s experience in establishing a new civil service pay system provides two useful lessons for practitioners elsewhere. First, the elimination of non-wage income is vital to successful pay reform. Second, reining in non-wage income requires budgetary reform, whereby off-budgetary funds that finance non-wage benefits are incorporated into the formal budget and subjected to proper supervision. China can also learn from other developing and transitional countries’ experiences, particularly with regard to public sector downsizing.

Exploring the Determinants of Job Satisfaction of Civil Servants in Beijing, China

“…The above analysis reveals, however, that salary is positively related to job satisfaction in the Chinese context. This might be attributed to the relatively low salaries that civil servants receive (Chan & Ma, 2011; Jing & Zhu, 2012) and the unequal distribution of salaries and benefits across different government agencies. Model 3 shows that increasing civil servants’ monthly income by 1,000 yuan, roughly 161 U.S. dollars, could increase job satisfaction by 0.21 points, holding other factors constant.…”

Politically connected boards and top executive pay in Chinese listed firms

“…However, when compared with the private sector, civil service pay in China, despite going through several reforms, is lower (Chan and Ma, ) and even lower for directors of state‐owned enterprises (SOEs), from where politically connected directors with business expertise are likely to be drawn. This is because, before the 1980s, the Chinese SOE was the lowest link in the chain of command of the central planning machinery (Mengistae and Xu, ).…”

The Effect of Pollution and Heat on High Skill Public Sector Worker Productivity in China

“…Chan and Ma (2011) posit that although the basic pay of civil servants is lower than that of the workforce in other sectors, the total compensation for civil servants is higher than the pay for workers in many other sectors.Ko and Han (2013) analyzes the differences in job motivations between public and private job seekers based on a survey of 329 students from 4 Chinese elite universities. They find that university students who possess a higher level of public service spirit, value high social status and pursue less stressful life prefer to choose public sector jobs.…”