The Decision Of Migration And Wage Determination Mechanism Of Migrant Workers

Since the Chinese economic reform, the labor migration among regions isbecoming more and more important. Labor migration affects the labor supply ofregions, and then affects the market wages of regions. To examine the labor migration,a framework intergaring the labor behaviours and firm behaviours should be proposed,and the impact of heterogeneities and rational decision making should be taken intoaccount. Tradictional researches rely on the homogeneity of labors or firms, or on theNash Bargain. By analyzing the labor market with heterogeneous participants, thispaper proposes a model that investigates the decision of migration as well as the wagedetermination in the labor markets. This paper demonstrates that equilibria of regionscan reach in long term even in the case that labors and firms are heterogeneous andlabors can migrate among regions. And the conclusions of market wage in long-termequilibrium have been examined: the productivity of labor, unemployment incomeand search efficiency have positive impact on the market wage, while the search cost,interest rate and separation rate have negative impact on the market wage.