Re-Examination Of The Urban-Rural Inequality And Its Influential Factors Based On The Perspective Of Labor Mobility

Since 1985, the income level of resident has been significantly promoted in our country, but the inequality has been enlarged at the same time, especially the urban-rural inequality, which has caused the relevant policy makers and economists attention. "The central file No.1" has focused on the "three rural" issue for 8 years, the key problem of which is the increase of peasant income. Some scholars have pointed out that labor mobility is the fundamental solution to increase farmer's earnings and narrow the urban-rural inequality. In fact, both the classical economists and the neo-classical economists are generally agreed that the labor mobility has the function to increase income and narrow the urban-rural inequality. The common form of the labor mobility is to flow from agriculture to non-agricultural sector, rural to urban areas in the developing countries. In the past 20 years, China has experienced a large-scale labor mobility. Only the number of labor out for work is 70 times than before, not including the planned migration and the long-term migration changing or not changing their identities. Theoretically, the urban-rural inequality should be narrowed through the large-scale labor mobility. However, the inequality is expanding when the labor mobility from rural to urban areas becomes the mainstream since1985. Does it mean that labor mobility in China does not have the feature of "factor price convergence"? Does the labor market fail to regulate?Some scholars have noted that in the process of labor mobility, a large quantity of rural population turned into urban residents and they were counted as rural population according to recent statistical system. These residents have higher capital and wealth level, so the population group has been changed obviously, which can enlarge the urban-rural inequality while the other factors remain unchanged. From this perspective, we re-estimate urban-rural inequality through attributing the identity-changed population to the original group. On this basis, based on the premise of the labor mobility, we re-estimate the urban-rural income gap and re-evaluate the contributions of the labor mobility and the labor market. Then we analyze the influential factors of urban-rural inequality in order to discuss which policy would narrow the inequality. We also forecast the long-term trend of urban-rural inequality by studying the convergence of the inequality. The above research will be helpful to evaluate the effect of labor mobility on "income equalization" and find out a more targeted policy to further narrow the urban-rural inequality. The main points of research content and the result are as follows:Part 1:By controlling the population sub-groups, we re-estimate the urban-rural inequality and find that the urban-rural inequality is not as large as shown in statistical data and may not continue to expand. It also shows that the role of converging urban-rural inequality through labor mobility may be masked by the identity-changed population. The labor mobility only regulates labor income through the labor market. However, we also find that the influence caused by urban-rural property and transfer inequality is gradually deepening, which would also cover the contribution of labor mobility.Part 2:Based on the premise of the labor market, we estimated the urban-rural earning inequality and found that this indicator appeared shrinking, its expanding was related to labor mobility that restricted by human beings. It fully described that the labor markets indeed have the function in narrowing the urban-rural inequality. Of course, the regulation just for urban-rural earning inequality, and the variational directions of the urban-rural inequality are also affected by the urban-rural property and transfer inequality. So the direction of urban-rural earning inequality and urban-rural inequality may not be the same. Labor mobility affects the urban-rural inequality by increasing the supply to urban labor market. However, if the demand curve had changed, it would offset the role of labor mobility, and then urban-rural income couldn't show the trend of convergence. Changes in demand are related to economic growth and increased investment of non-agricultural industries in urban areas. At present, constrained by the age structure and human capital, the rural labors suitable for the mobility have been reduced. The regulation of labor mobility and labor market will be restricted.Part3:While the labor mobility narrowing urban-rural inequality, other factors possibly played a negative role in urban-rural inequality. We use panel data model to analysis influencing factor of urban-rural inequality. Result shows that the main reason for enlarging statistical income inequality is the conversion of resident status. If the labor mobility is separated economic growth enlarges urban-rural inequality, but the impaction to the re-estimates has been improved in recent years. Investment is not conducive to narrowing urban-rural inequality, because the increasing speed of investment in non-agricultural is much higher than the rate of labor mobility and agriculture investment is a substitution to labor. Economic openness can reduce the urban-rural inequality in a certain extent, and the effect is to be limited because opening in different province is not the same. Other factors which should have narrowed the urban-rural inequality such as the financial expenditure, science education culture and health expenditure, infrastructure construction failed to play an active role in the two types of indicators, which because the governmental policies are clear urban-biased. Ownership structure is advantageous in the enhancement of the rural labor force income that enters the city labor market. However, the relevant policies that restrict the labor mobility still exist, which hinder the rural labor force into urban labor markets actually. So the ownership structure narrows re-estimated urban-rural inequality while the current statistics are expanded Education plays the role of reducing the gap in urban-rural inequality of the original urban-rural population group. But in the long run, the scale of demand must be taken into consideration when we make an investment of human capital to rural residents. If the investment exceeds the scale of demand, the rate of human capital will decline, which will have a negative influence.Part4:Controlling the population group, urban-rural inequality in different area will come into a convergence gradually. The rate of decline in different is the middle, the west and the east on turn, and the speed of urban-rural earning inequality's is much faster. Result futherly shows that labor mobility can narrow urban-rural inequality. With the reduction in the size of mobility, the tendency in urban-rural inequality which is reducing has been slowed down. The scale of rural labor forces those are suitable for transfer ascends from east to west. With the development of economy and improvement of infrastructure in the central and western regions, the declining of urban-rural inequality will be highest in west area, the central area followed, and the east area last. Then, the urban-rural inequality will be converged in the regions finally.According to the above conclusions, we proposes:(1) improve and perfect the labor market, eliminate the barriers of labor mobility;(2) eliminate the discrimination of the urban public goods, bring the transient population into the service objects;(3) enhance the government transfer payments, implement the reasonable redistribution policies;(4) establish a more equitable tax system, adjust the urban-rural inequality through the secondary distribution.