Relations Between Labor Mobility And Urban-rural Income Gap In The Process Of Urbanization

According to classical economic theory, free movement of labor will narrow the income gap between different regions. Massive rural-urban labor mobility, is an important phenomenon of China’s dual economic development. Since the reform and opening up, along with the movement of labor, China has a rapid economic development, urbanization achieved remarkable results, the absolute level of income of workers generally improved. However, changes in the income gap between urban and rural areas do not follow the trajectory of the theory, with a certain lag.Based on the literature review were related theories and research status of relationship between labor mobility and urban-rural income gap; secondly carried out the history and current situation of the process of urbanization, labor mobility and urban-rural income gap analysis; and then analyze influencing factors of urban-rural income gap to determine the variable of empirical analysis model; thereafter, using time series data, create a variable index system, perform OLS regression, empirically analyze the impact of each variable on the income gap between urban and rural areas; and finally, provide specific recommendations based on the results of empirical research.This study showed that:Xiang-cheng labor mobility has a strong convergence effect on urban-rural income gap, in line with theoretical expectations and the actual situation in recent years; accelerate the urbanization process is conducive to narrowing the income gap between urban and rural areas; to speed up the process of industrialization, non-farm industrial development otherwise will widen the income gap between urban and rural areas, probably due to urbanization and industrialization did not realize the coordinated development; the second industry labor rate of return is lower than the rate of return of the first industrial labor, it may be due to wage rigidity and the fiscal policy impact; due to statistical data of fiscal policy to support agriculture changes, cause the regression results do not show that the impact on the urban-rural inequality.