Heterogeneous Labor Mobility And Regional Income Gap

Internal formation mechanism of regional income gaps is a classical topic of economics.Introducing the labor heterogeneity in the C-P model of new economic geography theory,which provides a new perspective for us to observe the mechanism of the heterogeneous labor force mobility on regional income gaps.This paper puts forward a tentative analysis of the framework:heterogeneous labor mobility has changed the distribution of high and low skill workers,affecting the market potential of the region and the degree of protection of local government,causing the regional imbalance of income.Therefore,this paper will focus on analyzing the two problems:Firstly,we relax assumption of the labor homogeneity,introducing market potential and protection of local government in the process of heterogeneous labor mobility.We explore the causes of the formation of regional income disparity from this perspective.Secondly,though an empirical analysis of the spatial econometric method,we use the provincial panel data to inspect heterogeneous labor flow spatial spillover effect of regional income gap.At the theoretical level,new economic geography theory provides two paths of the market potential and the protection of local government to describe the relationship between heterogeneity labor mobility and regional income gaps.This paper extends the C-P model of new economic geography,and the corresponding mathematical model is established and explained.On the basis of model construction,the digital simulation technology is used to perform numerical simulations in the theoretical model of equilibrium condition to show the change trend between high and low skill labor mobility and regional income gaps.At the empirical level,we use the empirical panel data,collecting from 30 provinces during the decade from 2002 to 2012,and build degree index of high and low skill workers concentration which shows labor migration results to metrology inspect the results of theory analysis.Finally,this paper draws a conclusion that heterogeneous labor force mobility changes the structure of the labor force,and thus makes the space distribution of the high skill workers and low skill workers changed,affecting regional income gaps by influencing the market potential and the degree of protection function of local government.With the passage of time,the increasing relationship between high skilled labor mobility and the regional income level and decreasing relationship between low skilled labor mobility and regional income level is more and more obvious.What's more,The spatial interaction between the areas wage in our countries still notable,and the wage's spatial spillover effect between the adjacent provinces is also remarkable.Thus,because of the large inflows of heterogeneous labor,the southeast coastal areas in China get benefits,which is difficult to be changed in a short term.The conclusion of theoretical analysis and empirical research agree that free flow between the two kinds of labor force in the region is good for the convergence of regional income gaps.To build free labor market,we need to break the institutional barriers which labor market segmentation to form a fair competition mechanism of labor force,at the same time,we also need to accelerate reform of the implement of social security system.