Endowment, Uncertainty And The Mobility Of Rural Labor Force In Transitional Period

There is a phenomenon in the mobility progress of the Chinese rural labor forces in the period of transition. Somebody is urbanization. Somebody has to return to village after having worked in city for many years. Somebody is part time farmer. Somebody has never left village.Why does this phenomenon arise? Why do they choose different choice for themselves? We can explain the first question if we answer the second question. Furthermore, we can find the main obstacle that baffles the mobility of the rural labor force. We can also promote the mobility progress in order to reduce the earning gap between urban and village. This is the main aim of this issue.There are two reasons for the phenomenon happens in China in my opinion. The first is the personal endowments. An individual of labor forces, when he goes out for a work in urban, will encounter uncertainty. Maybe a firm would employ him. Maybe he would be unemployed. The reason is that the probability of employment is different for each individual because of the different personal endowments. The second is systemic factors. The systemic factors, which include institutions and the rate of economic growth, would also influence the mobility of the Chinese rural labor forces. The change of the institutions from one style to another style would influence the whole society not to say the mobility of the rural labor forces.So the progress of this research develops as follow. First, we will make a basic model, which is assumed that the institutions are fixed, to analyze the influence of the personal endowment to the probability of employment and the mobility style. Second, we will relax the assumption to analyze the influence of the institutes to the mobility style in the period of transition. Last we will make some advice to promote the progress of the mobility of the rural labor forces. Section one: The main contentChapter one introduces the research aim, plan, literature, significance, method, and framework of this issue.Chapter two asks the question why there are four styles in the progress of the mobility of the rural labor forces at first. And make some assumptions at second. Then, makes a basic model to answer the question according to the human capital theory, the theory of choice under uncertainty and the job search theory.Chapter three makes an empirical research of the mobility of the rural labor forces at this time. The aim of the empirical research is to test the conclusion of chapter two. First, it reviews the progress of the mobility of the rural labor forces from the building of the People's Republic of China. Second, it makes a statistical study of the mobility of the rural labor force at this time by use of the data collected by author. At last, it study which personal endowments would influence the individual probability of employment notably. Furthermore, it would study the influence of distance and liability to the mobility of the rural labor forces.Chapter four extends the basic model to explain the mobility of the rural labor forces in the period of transition by change the institute variables. These variables include wage institute, land institute, insurance institute, employment system, industry institute, education institute, and registration institute. Chapter five make some advices to promote the mobility of the rural labor forces from the conclusions of the above. It advises that we should reform the institutes from macrocosm.Section two: The main opinion1.This issue finds that there are some personal endowments, which include age, education, skill, social relationship and experience, influence the individual probability of employment notably. It also finds that the individual probability of employment would rise from the individual leaves village 10.5 years in average.The factors, which influence the rural labor forces to choose part time farming or full time job, are sex, the number of the employers the individual ever changed, and the distance.2.The conclusion about the research of migration backThe first probability of employment must be bigger than the lowest reserve probability if an individual wan to go out for work. The probability of employment will increase at first and decrease with time passing but someone's probability of employment would decrease all long. Some part time farmer would choose full time job with the increasing of the probability of employment.It is possible for somebody to be urbanization if the probability of employment is bigger than the reserve probability all the time.The individual probability of employment would increase if the individual increase his human capital by education and job training.3.There would be more rural labor forces to mobile and choose full time job and more rural labor forces to be urbanization if the wage rise.4. The conclusion about the research of land instituteThe one with high individual probability of employment would transfer their management right of their contract arable land if the rent rate of the land is low. It is to say if the rent is higher there are more rural labor forces would go out for fulltime job with lower desire to transfer their management right. Furthermore, somebody who has been urbanization would hold his or her management right except the transfer price is very high.The one with low human capital would not transfer their management right except the transfer price is very high.The one with higher individual probability of employment would rent their arable land if the rent rate of the arable land were fixed. The one would rent his arable land if the rent rate is high for the same one.The farmer can not get the real value of the management right in the trade of the arable land under the constraint of the present land institute. The arable land cannot be allocated to the farmer with high efficiency. It leads two affects. On one hand, we can not realize the specialization of the arable and get the scale economy. On the other hand, it baffles the mobility of the rural labor forces because of the low price of the arable land.There would be fewer labor forces to mobile if the earnings of agriculture increase more rapidly with the low rent rate of arable land. On the other hand, there would be more labor forces to mobile if the earnings of agriculture increase more rapidly with the high rent rate of arable land. We can make the proper industry policies to make the rural labor forces mobile in agriculture by making the farmer became agriculture worker.5. The conclusion about the research of the social insurance instituteThe individual would insure himself by making the arable be desolate if his probability of employment is low or the rent rate is low. He would get more profit by making the arable be desolate than rent the arable land to other people. Furthermore, the one with lower probability of employment would get more profit.The behavior of making the arable land be desolate would be lessened and there would be more individual choose full time job if we can offer an unemployment insurance with high level compensate.The local government would not supervise the firm strictly because of game among all the local governments. So the firm would not make unemployment insurance for the peasant-workers voluntarily because they have market power. The peasant-workers would not request the firm to make unemployment insurance for them because they worry about the firm fire themselves. All of these leads there are few peasant-workers get employment insurance.6.This issue makes some advices as follow.We should reform the institutes from macrocosm including wage institute, land institute, insurance institute, employment system, industry institute, education institute, and registration institute.In order to build an uniform social insurance system the central government should build a fund pool to balance the gap of the fund which led by the individual migrate between different areas with different economy development speed.We should reform the registration institute progressively. We should emphasize the reform of the education institute, employment system, land institute, wage institute and insurance institute at first. And reform the registration institute by the progress of the reform of the above institutes.Section three: The main contribution of this issue1.The view of this issue is very particular. There is little literature research why there are four styles in the progress of the mobility of the rural labor forces. This issue extents the research by making this question as breakthrough point.2. This issue makes a framework to answer the question why there are four styles in the progress of the mobility of the rural labor forces according to the human capital theory, the theory of choice under uncertainty and the job search theory.3.this issue gets some important conclusions in section two.4.This issue is helpful to practiceThe conclusions of this issue is helpful for the government to find the reasons which baffle the mobility of rural labor forces and helpful for the government to make proper policies to promote the mobility of the rural labor forces.The data collected by author can help the government get first hand information of the mobility of the rural labor forces. It can also provide a reference for other research.