Research On The Relations Between Labor Flow And Rural-Urban Income Disparity In China

Since the policy of reform and opening up has implemented in China, China's economy has shown a trend of rapid development, and GDP increased from 362.4 billion yuan in 1978 to nearly 40 trillion yuan in 2010, becoming the second largest country in the word.With the economic growth, the scale of China's rural labor mobility also has expanded each year. According to the statistics, in the end of 2009, the flow of rural labor in China had reached 160 million. In accordance with the classical theory of development economics, labor mobility can reduce the urban-rural income gap. However, at the same time, the urban-rural income gap in China has been expanding, and the urban-rural income gap is the main reason of the large income gap in China. In 2010, China's Gini coefficient was 0.458, which was far exceeding the international warning line, and it has seriously affected the development of China's economic stability and social harmony.This paper analyzes the reason for the paradox that the labor mobility and the urban-rural income gap are expanding and also makes some relevant recommendations. Firstly, the author analyzes the theory of development economics about the relations between the labor mobility and income gap which is the base of the study. Then, the paper analyzes the data about the scale of labor mobility and income gap of the whole country and four major economies area, that is, eastern, central, western, north-eastern region, by the method of the empirical study.And the paper also confirms that the size of the labor mobility and the income gap are expanding at the same time.Third, the paper discusses four conditions that the labor mobility can narrow the urban-rural income gap. The four conditions are high wages, large migration, the balance of urban and rural development and the free flow. Fourth, the paper sums up the reasons of the paradox that the labor mobility and urban-rural income gap are expanding at the same time. At last, the author has put forward for some policy recommendations to reduce the urban-rural income gap.