The Research On Labor Mobility And Industrial Spatial Structure

Labor mobility is an important factor affecting spatial economy structure. In recent years, many studies achieved many results within the framework of the new economic geography which was created by Krugman, Fujita and Venables.New economic geography suggests that labor mobility and its geographical distribution have a significant impact on industry agglomeration, industry desperation and regional differences.New economic geography provides a new method of labor mobility to study the spatial structure of industry. But there are many characteristics need to be improved because of homogeneous labor and "iceberg cost" assumptions. Heterogeneity labor and diversity costs have become a common phenomenon, so what will be happening if we improve the homogeneous labor and "iceberg cost" assumptions?In this paper, we analyze theories of labor mobility and industry spatial structure and explain the changes in spatial structure of Chinese industry and the phenomenon of regional disparities.The methodology adopted in this paper is to combine mathematical models with case studies. For all the theories of industrial clusters analyzed, the two methods are both used with mathematical models as proofs and case studies as explanations.There are two parts of theoretical models and empirical studies of two parts in this paper. The theoretical part has three theoretical models. The first is a general equilibrium model based on the FE model which is established by the Forslid and Ottaviano in Chapter Three. The second is a partial equilibrium model in Chapter Four based on Krugman's labor pooling model. The last one is a general equilibrium model based on industry desperation model in Chapter Six. While using the models of Krugman, Forslid and Ottaviano, the author adds his own study instead of quoting from them directly.As the basis of theory, first model analyzes the balance and stability of the spatial structure of industry under heterogeneous labor condition. With the introduction of heterogeneous labor and diversification of the region and inter-regional trade freedom, model updates the relationship of labor mobility and industrial spatial structure. Human capital which with lower mobility cost has a more obvious industry agglomeration effect and enhances the effects of income. When factor mobility cost decline, the area with higher share of human capital will access more centripetal force than lower one. In particular, the human capital mobility will affect regional trade costs, and its spatial structure of industry impact will be greater than the general labor mobility. Labor mobility in heterogeneous conditions, the optimal and sub optimal welfare structure will undergo dynamic changes.Labor pooling model analyzes the labor market pooling effect, which is a decisive condition for labor mobility. Through the establishment of micro-theoretical model of the labor pooling effect on wage income and industry agglomeration, we analyzes the mechanism of action that labor mobility effect industry spatial structure on market pooling level. Human capital and common labor all have significant labor pooling effect, but their influences on wage income and regional development are different.Industry dispersion model analyzes the conditions and rules of the regional industry spread, which is based on the industry agglomeration model. The advantages of industrial agglomeration will make the central region's wage level are higher than other areas. As this process continues, the wage gap between regions may become too large to be sustainable.It is then profitable for individual firms to set up manufacturing in a second region, which begins to develop self-reinforcing advantages of its own and thus has a surge in wages. Then at a later date, a third region goes through the same process, and so on.Through model analysis and simulation we get some conclusions on the spread of industry. First, if two regional economy systems have become the "center periphery" structure, the economic system agglomeration equilibrium will be broken under the condition that the trade cost is low, technology advances quickly or regional wages gap goes higher, the industry dispersion will be happen. Second, industry dispersion follows some rules of geography and factors. The processes of industrialization in various regions are different, but all along a wavy path forward. When a region reaches a critical point of the industrial scale, other areas will be followed through the process of industrialization. The success of industrialization will lead to higher wages, so as to pave the way for industry dispersion. The industry with high labor-intensive will transfer first, because wages in these industries are much sensitive.Empirical content of the article is also divided into three parts. First part analyzes the micro-mechanism of the labor market pooling impact of the industrial clustering under shocks. In this paper, we use Chinese cities panel data to set a regression model with results showed that:1) Labor market pooling has a positive significant effect on industry spatial concentration. This supports the theoretical prediction of Spatial Economics, as well as provides evidence from China for Labor market pooling studies; 2) The size of the urban population has a significant positive impact on industry clustering, the capacity of local consumption can promote Industry agglomeration; 3) The wage premium has a negative impact on industrial clustering, the income gap has become an obstacle to the manufacturing industry agglomeration.The second part calculated the labor agglomeration degree of 31 provinces in China using 1990,2000 and 2007 census data based on the new economic geography theoretical model, and this could explain the developments of China's economic geography and regional gap. This paper found that:(1) Human capital accumulation is an important factor in the formation of industrial agglomeration. Meanwhile, the increase in degree of human capital accumulation will raise the region's income level. (2) Accumulation of human capital between provinces have very different degrees. The uneven distribution of human capital may lead to a further degree of regional income disparities; This paper argues that the sufficient labor mobility and uneven distribution of industrial clustering centers generated regional disparity.The third part is the experience of industry dispersion model. We observed the rules of industry agglomeration and dispersion using Chinese statistic data in 1990-2008 of tow digit industry. From 1990 to 2008, the industrial spatial structure has gone through the process form agglomeration to dispersion. The spread order in term of geography is that the industry agglomeration degree in eastern provinces such as Guangdong, Jiangsu, Shanghai and Shandong was decline, leading industry dispersion phenomena. In comparison, the central provinces such as Henan, Anhui, Hubei and other, their industry agglomeration degrees are increased. Industry dispersion phenomenon began in China, some industries move from the east coast to the central region. The spread order in term of sector, beverage manufacturing and textile industries of labor-intensive are the first to spread. The phenomena support the theory of inference. After 2003, more and more sectors appear dispersion trend that the industry share of eastern provinces decline and share of central area increase.Finally, this paper illustrates the trend of research on labor mobility and industrial spatial structure based on previous analysis. We also provide some policy implications and suggestions.