Study On The Effect Of Labor Mobility In The Labor Market Segmentation

That the wages have full flexibility and the labor market is a fully competitive unified market is a basic assumption of neo-classical economic theory, according to which the labor can flow freely. But the realistic situation is far from what the neo-classical economists have ideally envisaged, because in fact, the labor market is segmented rather than unified.According to foreign&domestic literature, and by taking China’s reality into account, we find out that China’s labor market is segmented conspicuously, instead of showing the characteristics of perfect competition because of various reasons, especially those institutional factors. So, to a large content, the assumption of full competition of labor market is not in line with China’s actual situation. Thus, in order to achieve a Pareto improvement on the allocation of labor resources, and improve the operating efficiency of China’s labor market, we have to start from the reality that the labor market is segmented, and have a close study on the causes, expressions of labor market segmentation, as well as its influences on the labor mobility, and only by which can we find out the measurements of eliminating or reducing such labor market segmentation, and promoting the free labor mobility.On the one hand, the causes of labor market segmentation are varied; on the other hand, the labor market segmentation can be divided into different types when viewing from different perspectives. Therefore, we should not take all the causes or segmentation types into account without any priorities——as for the causes, we will study the institutional factors primarily; as for the segmentation types, we will just choose to study the three most conspicuous ones from our point of view——urban&rural segmentation, institutional segmentation and regional segmentation, for they have the greatest impact on the labor mobility.Through a series of studies in the paper, we find out that:in order to establish as well as improve a unified labor market, make full labor mobility become true and improve the allocation efficiency of labor resources, we must take a complete reformation on the irrational household registration system, increase the investment in the education and especially promote equality on the education, establish and improve the social security system, foster market-oriented allocation mechanism of labor resources, and continue to deepen the reformation of the economic system.