The Impact of Labor Mobility on Urban - rural Income Gap: Based on Life Cycle Perspective

Xinyang Liu

The Impact of Labor Mobility on Urban - rural Income Gap: Based on Life Cycle Perspective

Xinyang Liu

Viewed from the life cycle perspective of the rural labor force, the labor flow in the process of urbanization is happening in three stages. The first stage is seeking non-agricultural employment in rural areas; the second stage is securing the urban resident employment; the third stage is migrant workers obtaining urban household registration. This study establishes a multi-regression model of urban and rural income disparity that takes into account other control variables. The results of the model analysis show that the first stage of labor mobility can significantly narrow the income gap between urban residents and rural residents; yet the second stage of labor mobility does not expand the income gap between urban and rural areas in a significant manner; the third stage of labor mobility can substantially reduce the income gap between urban and rural areas; the combined effect of the three stages of labor mobility is substantial shrink of the income gap between urban and rural areas. However, the reality of the discrepancy between urban and rural income gap in China is not consistent with the gradually dwindled large-scale labor flow, mainly due to industrialization, urban biography of cultural and educational finance, and foreign trade expansion of urban and rural income gap.

With the progress of socialist modernization, China's policy of restricting labor mobility gradually liberalized, the rural labor force to the town's large-scale flow, urbanization process is also greatly accelerated, urban and rural income gap in most years has been expanding. This paper attempts to solve the gap between urban and rural income gap, from the perspective of rural labor mobility cycle, the analysis of China's labor force, the labor force of the labor force, the Impact of Floating on Urban - rural Income Gap.

Disputes over the Income Gap between Urban and Rural Labor

There are several different views on the impact of labor mobility on the urban-rural income gap in the process of urbanization. The first view is that labor mobility has the effect of narrowing the urban-rural income gap, but this effect has been greatly weakened by the labor market distortions; the second view is that the labor force lifted the wages of the existing labor force in cities and towns, Gap; the third view is that labor mobility in some cases can narrow the urban-rural income gap, in some cases can expand the urban-rural income gap[1].

Most scholars believe that labor mobility has the effect of narrowing the income gap between urban and rural areas, few scholars believe that if the labor flow led to the existing wage increase in urban areas will not help narrow the urban-rural income gap. There are some scholars who believe that labor mobility is narrowing or expanding the gap between urban and rural areas there are some prerequisites[2].

In addition, China's existing statistical methods will lead to urban and rural income gap is overestimated or underestimated. Sicular etc. believe that most studies do not take into account the spatial differences in living costs[3]. If the cost of living in urban areas is higher than in rural areas, the real income gap is not as large as the literature suggests; most of the assessment of urban and rural income disparities in China Living in the town but no urban household registration staff, out of this lower than the urban residents but higher than the rural residents, means overestimating the income gap between urban and rural areas[4].

Most studies have studied labor mobility as a whole, ignoring the differences in labor mobility at different stages (types) and the different impacts on urban-rural income disparities. This is exactly what this article is trying to solve.

Analysis of Framework Based on Life Cycle Perspective

The main influencing factors of urban -rural income gap

The income gap between urban and rural areas is generally expressed by the ratio of per capita disposable income of urban households to per capita net income of rural households. Anything that have impact on these two indicators will influence the urban-rural income gap[5,6].

Considering the tendency of statistical factors to overestimate or underestimate the urban-rural income gap, it is assumed that the impact of statistical factors here is neutral in the analysis of this paper. Viewed from the labor cycle perspective of China's labor force, the general agricultural labor force in rural area normally get into the second and tertiary industries employment from the primary industry, then flow to the town entering the second and third industry employment, and finally obtain urban household registration and become a citizen, this whole process may go through three stages. The first stage is seeking non-agricultural employment in rural areas; the second stage is securing the urban resident employment; the third stage is migrant workers obtaining urban household registration. And the corresponding labor force in these three stages are divided into three categories, the first category is the non-agricultural employment labor force in rural area, the second category is the urban resident agricultural household labor force, the third category is the migration of urban household labor. the mobility characteristics of urban and rural income gap is also varied among different stages.

In addition to the impact of labor mobility on urban-rural income disparities, it is generally assumed that the following factors will also have certain influence including industrialization, agricultural modernization, financial development intensity, financial support for agriculture, fiscal and agricultural expenditure, science and education, foreign trade, transfer of income to rural areas and macroeconomic policies.

Variable selection and index system construction

Based on the above analysis of the factors that influence the income gap between urban and rural areas, the variables and representative indicators influencing the urban-rural income gap (Urg) are selected to evaluate this gap.

Establish multiple regression model

In the above variables, Urg is theexplanatory variable, representing the urban-rural income gap, and L1, L2, L3 is also the explanatory variable, representing the first, second, and third stage labor flow Items like Id, Am, Fd, Fu, Fa, Fe, Ft, Rt are the control variable, symbolizing other factors that affect the urban-rural income gap. D1, D2 are the dummy variables that respectively, from 1978 to 1984, 2008 to 2015, stand for the impact of macroeconomic policies. According to the existing variables, the following multiple regression equation is constructed to evaluate and analyze the impact of various factors on the gap between urban and rural income:

Here: c is a constant term and μ is a residual

The control variable is

The dummy variable is

i=1978,…,2016

Empirical analysis results

According to the above established multiple regression model and identified data sources, SPSS17. 0 software can estimate the multiple regression model. Variables (explanatory variables, control variables, and dummy variables) enter the equation for "backward", and the criteria for deleting variables are statistically significant greater than 0.1.

The final regression equation is adjusted to 0.961 8, and the F statistic reaches 135.196 5, which indicates that the overall regression equation is very high and the fitting degree is very good. The three explanatory variables including L1, L2, L3 are eventually remained in the equation, but the coefficients vary widely and the significance is not the same. L1 at 0.01 level was significant, and the coefficient of variables reached 0.1273. According to the previous setting, L1 is the inverse index. Therefore, as L1 increases by 1 unit, the natural logarithm of the dependent variable Urg will decrease by 0.1273 units. Thus, the first stage of labor mobility (L1) can significantly narrow the urban-rural income gap, which is consistent with the previous forecasting direction. This shows that when the urban employment opportunities have not yet been obtained, the surplus agricultural labor force is transferred to non-agricultural areas in situ, the income level of rural households can be improved and the income gap between urban and rural areas can be narrowed. L2 was significantly at 0.05 level with a variable coefficient of - 0.0266. According to the previous setting, L2 is the inverse index. Thus, as the L2 increases by 1 unit, the natural logarithm of the variable Urg will increase by 0.0266 units. On one hand, it may change the urban-rural income transfer model due to the trend of younger age resident with agricultural household registration that is mainly based on "migrant workers" and affects the overall influence of second-stage labor force on urban-rural income gap. It may also be because the second stage of the labor force produced by the laughter of the labor division of labor proposed to promote the improvement of urban residents’ income, thereby expanding the urban-rural income gap L3 at 0.01 level was significant, the coefficient reached -0.1175. As L3 increases by 1 unit, the natural logarithm of the variable Urg will decrease by 0.1175 units. This shows that the urbanization process of the agricultural transfer population, which is the main symbol of urban household registration, helps the agricultural transfer population to obtain equal employment opportunities and social treatment, improve the socioeconomic status, income level and the ability to transfer income to rural areas, change into urban residents and promote the convergence of urban and rural income gap. As Fe increases by 1 unit, the natural logarithm of the dependent variable Urg will increase by 0.0917 units. It shows that the improvement of financial and cultural expenditure (Fe) can expand the income gap between urban and rural areas in a very high level. The city's biography of science and education is also one of the reasons that cause the expansion of urban and rural income gap.

Conclusions

This paper analyzes the three stages of the labor flow in the process of urbanization based on the life cycle perspective. The results show that the first stage of labor mobility can significantly narrow the income gap between urban residents and rural residents; yet the second stage of labor mobility does not expand the income gap between urban and rural areas in a significant manner; the third stage of labor mobility can substantially reduce the income gap between urban and rural areas. These three stages of the combined impact of labor mobility is able to significantly narrow the urban-rural income gap. The policy implication of the above research conclusion is that we should actively guide and support the rural labor force to participate in the non-agricultural employment in rural areas according to the situation of individual and family endowment, focus on the development of social service work adapted to the socioeconomic characteristics of the region, realize the local optimization of rural labor force , increase the ability to build "three rural" long-term mechanism with a stable growth.

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（Author Affiliation：School of Economics and Management, Beijing University of Chemical Technology）