An Analysis On The Impact Of Segmented Labor Market In Urban And Rural Areas On The Welfare

Labor force have been free to transfer from rural to urban areas in China nowadays, but the surplus agricultural labor force who have transferred to the city -migrant workers, can not have the same treatments as local workers have, because of the household registration system in urban and rural areas caused by the existence of segmented labor market. There are a lot of differences between migrant workers and local workers in jobs, wages, social security and labor protection. Segmented labor market affects the welfare of migrant workers, and also plays a negative role on social welfare.Firstly, we will make use of the second agricultural census data and prove the existence of segmented labor market in urban and rural areas from the perspective of non-farm labor supply. Secondly, we will make use of the questionnaire data in Zhejiang Province and analysis the impact of segmented labor market on the welfare between migrant workers and local workers, based on "capability approach" theory. Thirdly, we will analysis the impact of segmented labor market on the social welfare with a macro perspective.Through the statistical and econometric analysis, we conclude that, under the segmented labor market in urban and rural areas, the welfare of migrant workers is worse than that of local workers in the aspects of jobs, wages, social security and labor protection. In the aspect of social welfare, segmented labor market produces a huge institutional opportunity cost, slows down the pace of development of the city, affect the industrial structure and the allocation of labor resources and limit the development of agricultural modernization.