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Abstract
This paper investigates a novel consequence of authoritarian state building: attracting talent from society into the state apparatus. We analyze the impact of China’s value-added tax reform on citizens' preferences for state employment, revealed by participation in the National Civil Servant Exam. Using a difference-in-differences approach that leverages pre-reform subnational tax composition variations and a dataset of 166,012 government job openings from 2010 to 2021, we find that the reform has attracted more and higher-quality individuals to tax-related state positions, particularly those involving greater regulatory power. An original survey reveals that exam takers perceive increased power and benefits in tax agencies after the reform. Evidence from Chinese General Social Surveys suggests the talent drawn to the state likely comes from the private sector. Overall, our research indicates that state power expansion, when paired with merit-based recruitment, significantly influences talent allocation between the state and society in authoritarian settings.