The Rural-Urban Segmentation Of Labor Market In China

Unlike other countries, China's rural-urban segmentation (RUS) is the result of artifitial institution design. After 1978, this segmentation form brought a lot of negative effects. Based on the DLM theory, this dissertation answers the three questions:(1) What is the main feature of China's RUS in urban labor market? (2) What extent is the RUS of urban labor market in China? And (3) what is the consequences of RUS in China? In this dissertation, the theoretical methods of institutional analysis and the empirical analysis of multivariate statistics, econometrics, and structure equation modeling are applied to explore those three issues.The Rural-Urban Segregation System, on the one hand, made the rural residents very poor and they could not afford to invest human capital to themselves and their offsprings. On the other hand, the city bias of public resources allocation resulted in the lack of financial investment in rural compulsory education and rural public sanitation. Consequently, the rural labor forces are in a weak position to their urban counterpart before their entries into the labor makets and this phenomenon does not completely disappear after 1978. The last ten years of twentieth century saw the critical period of China's labor markets. The basic statistical results of CHIP miro-data and the statistical yearbooks data show that most of the rural Hukou residents are employed in bad industries or bad jobs. Based on those experiences, the typical characteristic of the urban labor market in China today is double dualisms, say, internal-external dualism and rural-urban dualism, nesting in secondary sector in internal-external duanlism. Adopted China's Urban Household Survey data, the outcomes of cluster analysis support the feature and the outcome of switching regression model validates the hukou barrier of rural migrants employed in the primary sector.Second, an index of RUS is created followed the Mincer Model and the indices of sub-markets are calculated under the samples classification of SRM. The results show that the RUS degrees of secondary sector, bad industries, and bad ownerships are higer than those of primary sector, good industries, and good ownerships, respectively. However, the calculations of opportunities of sub-markets under the MNLM Model show that Hukou differences of primary sector, good industries, and goo d ownerships are respectively larger than those of secondary sector, bad industries, and bad ownerships.And third, the urban labor market segmentation undoubtedly results in the welfare inequality among labors. This paper adopted the CHNS micro-data, followed the welfare definition of Amartya Sen's Capability Approach, and applied the MIMIC model of structure equation modeling to calculate and compare the level of individual Housing and Healthy,The results show that the average level of Healthy deteriorates and the average level of Housing does not change much. And the calculations of Theil Index show that there does not present strong correlations among the inequality level of Housing, Healthy and income distribution in provoincal subsamples and hukou subsamples. Generally, the inequality degree of Housing is greatest, followed by Healthy inequality and the income inequality level is minimum.Chinese government will put the establishment of uniform labor market and promotion of equally employment as main objectives. In order to realize these objectives, it is not a solution of one or two measures but a systemic project. The segmentation of labor market in China emerged from a path dependent problem left from planned economy is the main obstacle of the establishment of uniform labor market. In order to solve this problem, it is the key element that the difference rights between rural and urban labor forces must be resolved and it needs a systematic adjustment of labor rights.