Study On Transfer Of Rural Labor In The Process Of Rapid Urbanization And Its Economic Effects

Since the beginning of the new century, the pace of urbanization has accelerated markedly. The average annual increase is1.3percentages. According to the regular pattern of the development of urbanization, China’s urbanization has entered a phase of rapid development. In the end of2010, the urban population is69079, the proportion of the total population is51.3percent, and it’s more than50percent for the first time; urban construction land area is39,758square kilometers, compared with11,608square kilometers in1990, increased of242.5percent. Compared with the urbanization of land, the urbanization of the population is relatively backward. The reason is that the rural labor to urban areas is not smooth; and rural to urban migration is restricted.This paper firstly reviews the status and history of China’s rural labor force transfer in the process of rapid urbanization. Urbanization and rural labor transfer is essentially the same problem, when a large number of rural labor transfer to urban employment, on the macro performance it is the process of urbanization. From the data of the labor force transfer, the education level of the rural labor force improved continuously; income from working outside is a large proportion of total income for peasant houshold; the process of the rural labor transformation is also the process of China’s household registration system constantly loosing. At present, China’s urbanization process is facing many predicaments which are related to the blocked rural labor force transfer. Solution of these problems simply needs to rationalize the channels of transfer of rural labor.Secondly, this paper constructs the economic model of two departments of the agricultural sector and non-agricultural, using the basic supply-demand theory to analyze the factors affecting China’s rural labor force transfer. Technology progress and capital stock investment in the agricultural sector are important factor for China’s rural labor force transfer. There is a two-way interaction between technological progress and the transfer of rural labor in the agricultural sector. The size and growth rate of non-agricultural sector output determines the scale and speed of transfer of rural labor, due to the matching relation between capital and labor, physical capital investment of non-agricultural sectors also have important implications on the transfer of rural labor. An empirical analysis of the article also confirms the conclusions of the theoretical analysis.Again article summarizes the researches into the effect of labor transfer on economic growth. In this paper, direct method is used. In order to solve the multicollinearity problem between the factors of production, ridge regression method is used to estimate the production function of China’s agricultural sector and the non-agricultural sector, then to obtain their respective the marginal productivity of labor. This is the basis for the calculation economic growth effect of China’s rural labor force engaged in agricultural production transferring to non-agricultural production and. Compared with the past, the paper selects more factors of production, more accurate estimates of production functions. By calculation, the article find that the effect of overall economic growth effect of China’s rural labor transfer is about two percentage points, which means that one important source of China’s rapid economic growth is labor transfer effect. And this source is most stable growth in China’s economy, especially in the economic downturn; the contribution of rural labor transfer effect to economic growth is larger. In199060%of the economic growth is from the rural labor force transfer effect.Finally, the paper focuses on the role of labor transfer on the problem of the income gap between urban and rural. Labor transfer from the industry with lower marginal productivity to the high marginal productivity of industry, subserve narrow the gap of labor productivity between two departments, thus achieving the goal of narrowing the income gap between urban and rural areas. China’s labor transfer has its particularity, in addition to the household registration system and other restrictions, as well as the two most important factors. First, the transferred rural labor force, migration is a very small proportion; the second is wage of the transferred rural labor is much lower compared with their productivity. Because of these two factors, the effect of labor force transfer on narrowing the income gap considerably discount, or even the opposite effect, which also explains the contradiction of simultaneous expanding of China’s urban-rural income gap and the labor transfer.The most important way to narrow the income gap is to rely on the convergence of economic growth. This paper’s empirical analysis shows that China’s per capita GDP growth will help to eliminate the income gap between urban and rural areas. From a statistical point the relationship between China’s income disparity and economic development level is already in the second half of the "Kuznets curve". But it is largely the result of government redistribution effect. China’s income gap is too large to rely solely on market forces. However, sustained economic development is the fundamental way to solve the problem of China’s income gap.In the end, a number of policy recommendations are addressed for these issues.