China’s Rural Surplus Labor Force Migration And Urban Rural Inequality: An Empirical Analysis Based On A Nonlinear Model

Since the reform and opening up in1970s, the income of urban and ruralresidents has made significant growth, but the urban-rural income gap is increasinglydistinct in China. The trend of urban and rural income ratio shows the “W” shape, theoverall level keeping on expanding, and changing from2.6:1in1978to3.23:1in2010, with an average annual growth rate of0.81%. At the same time, along with theincreasing urban-rural inequality, the coexisting phenomenon of massive ruralsurplus-labors transferring into urban area and the returnees comes into notice. Alongwith the increasing income gap, the mass flow of surplus labor force and regionalimbalance become the "paradox" in theoretical research. Therefore, the relationshipbetween the income gap and the transfer of rural surplus labor force is important toguide the rural surplus labor force flow, the narrowing of urban-rural income gap, andthe distribution mechanism of urban-rural. At the same time, it can provide a helpfulreference for solving the "labor shortage" and "recruitment difficulties" frequentlyoccur in eastern after the international financial crisis in2008.Based on the above statements, this paper measures and estimates the totalquantity of rural surplus labor and the transfers in China. Combined with China’smacroeconomic development cycle and major policy adjustment, we redivide thestage of the transfer of rural surplus labor force. From the national level, regionallevel and industrial level, the paper details in describing the current situation of rurallabor surplus and the urban-rural income gap. On one hand, with the improved method,the paper works out the quantity of the rural surplus labor transfers.Then according tothe actual observation data, this paper presents the nonlinear model containing thethree times of the urban-rural income gap, in order to test the relationship between theurban-rural income gap and the rural labor force transformation. On the other hand, itdynamically simulates the relationship between the urban-rural income gap and thesurplus labor force transfer in31provincial panel and the east-middle-west regions,by the application of dynamic panel data model.Research shows that, from the national level, the relationship between theurban-rural income gap and the rural labor transfer presents phase change, which hastwo obvious inflection points appearing in0.088and0.1624Theil coefficient. TheTheil coefficient in the past two years shows that the surplus rural labor transfer is in the third interval, indicating the scale of rural surplus labor transfer will be still inrapid growth. And the specific performance will be from the east to the Midwest, fromcity to township. From the31provincial panel data, the relationship between theurban-rural income gap and the rural labor transfer appears to the nonlinearity "N"shape, and the transfer of rural surplus labor is a dynamic adjustment process. Fromthe east-middle-west regional dynamic panel model, eastern and middle areas have thenonlinearity "N" type relationship between the urban-rural income gap and the rurallabor transfer. The coefficient of eastern area is significant than the middle region,and the western area does not have the relationship. Therefore,it is the key period ofstructure optimization and regional coordination for labour force migration.TheMiddle and west areas need to actively undertake industrial transfer, raise theminimum wage standard,guide backflow labor force and the area industrialdevelopment mix together combined with the characteristic advantage industry;Theeastern region need to continue to "vacate basket change a bird", carry out thepreferential policies like citizenization of migrant workers to attract skilled andhigher human capital labor force,promoting the upgrade of industry and thecombination of human capital upgrade great-leap-forward development.