A Study On The Labor Mobility In China And Its Impact On Regional Economic Growth

With the acceleration of China’s economy and urbanization development, amassive wave of labor mobility is forming because of the transition from strict labormigration control to the loosen labor mobility control currently in China. Accordingto the "Report on China’s Migrant Population Development in2013", the number ofChina’s migrant population was236million people in2012, which means there is onemigrant personnel from every six individuals. Particularly, it is the labor mobilityfrom western region to eastern coastal region that has become a microcosm of China’seconomic and social development since the reform and opening-up policy came intoeffect.Neoclassical Economics’ growth model suggests that the labor factor is one ofthe most important elements of economic growth. The free labor mobility will narrowthe development gap between regions and balance the development of regionaleconomy. The New Economic Geography theory believes that free labor mobility willincrease the labor’s agglomeration effect, thereby contributing to the development ofindustrial agglomeration, which forms a cycle of self-reinforcing relationship betweeneconomic growth and economic agglomeration. As a result, the gap between regionsis gradually widened.This paper took the overview of the development process of China’s labormobility as a starting point. Firstly, this paper described and analyzed the currentsituation of China’s labor mobility. Then this paper gave an Empirical analysis onChina’s labor mobility factors, using the provincial cross-section data in2002and2012, to reveal the internal mechanism of labor mobility. Then come to the main section, which aimed to find the impact of labor mobility on regional economicgrowth by applying empirical method, using the provincial panel data from2002to2012. Finally, on the basis of theoretical analysis and empirical analysis, this papertargeted to make some policy recommendations.The main conclusions of this paper are as follows:First, the current scale of China’s migrant population continues to expand, andthe direction of mobility is mostly from the Midwest to the East. Moreover, the netinflow and net outflow of labor among the provinces shows a very unbalancedsituation. Most of the migrant labors are15-39years old people, but there is ascattering trend. In addition, the migrant labors are under a low level education,mostly junior high level, but there is a significant improving trend. Migrant laborsmainly find jobs in the manufacturing industry or business market, however, there is agrowing trend in the tertiary industry.Second, by using the empirical method to analyze the factors of labor mobility,this paper found that, first of all, the economic factors are still the most importantfactors which motivate the labor mobility. Individuals are mainly based on"cost-benefit" analysis to make decisions about whether to migrate or not. Secondly,in addition to economic factors, the policy of our economic system had a great impacton labor mobility. Moreover, with the development of era, the impact of humancapital on labor mobility is becoming more and more important.Third, by conducting the empirical research on the impact of labor migration onregional economic growth, the paper found that, first of all, labor mobility had apositive effect on the three regions’ economic growth, but there were significantdifferences among the three regions. Secondly, the economic agglomeration broughtby urbanization had a remarkable positive effect on economic growth, and the labormobility could play an important role in promoting the industrial cluster andurbanization. Finally, in the era of knowledge economy, human capital also played an important role in economic growth and its impact are becoming more and moresignificant.This paper argues that, during the "new normal" economy, our nation shouldcontinue to break the barriers on labor mobility and accelerate urbanization, in orderto make urban agglomeration come into effect. At the same time, it is necessary toguide the the labor force of eastern region to flow back to the Midwest region and tobuild a collaborative model of industrial transfer and labor mobility. In addition, ourgovernment should continue to improve the social security system, and effectivelyprotect migrant labor’s benefits, meanwhile we should increase the investment onhuman capital, improving the employability and the innovative ability of workers.