The Research On Labor Mobility And Regional Income Disparity

The research on labor mobility and regional income disparity is a great theoretical and practical significance of the research topic. In recent years, the research topic related to labor economics, neoclassical economics, new institutional economics and many other disciplines.By observing the real world, we find that China’s economic development is extremely significant spatial factors. Ten urban agglomerations account for10%of the whole land area, while their economic gross account for over2/3of the gross domestic product. Especially, the Beijing-Tianjin-Hebei Metropolitan Region, Yangtze River Delta Region and Pearl River Delta Region amount to4%of the land area, while they contribute45.4percent of the total economy. The spatial pattern of China’s economic development is increasingly forming the "core-periphery" structure. As a result, it is an important task for us to research how the space factor works in the expansion of regional income disparity.U.S. economist Paul Krugman put forward the "core-periphery" theory in the1990s, which means the emerging of the spatial economics. By virtue of his groundbreaking and exclusive research in the spatial economics, Krugman got the Nobel Prize in economics in2008. According to the spatial economics, among the formation of "center-periphery" structure, labor mobility is a key factor. From the theoretical analysis of spatial economics point of view, when the core region enjoyed the benefits of economic development in the agglomeration, and outlying areas could also share the benefits of agglomeration economies through the free flow of factors. Take the labor factor for example, the labor moving to the core region would get higher income than those who stayed in the outlying areas. In the meantime, the local population in outlying areas would be able to share more of natural resources because of population decline with the flow of labor, as a result, their income can be improved accordingly. Finally, when the core region gathered too high, the market crowding effect would happen by the central diffusion to outlying areas of the industry. And regional disparities will tend to converge. So, we cannot help but ask:(1) comply with China’s economy this view realistic?(2) what kind of relations is between the Chinese labor trans-regional flows and regional income disparity?(3) whether the theory of spatial economics can be used to guide the coordinated development of China’s regional economy?Based on these three issues, research paper attempts to achieve the following three objectives:(1) through statistical data on labor mobility and regional income disparity, we want to master their present situation and dynamic characteristics;(2) by relaxing the assumption of homogeneity of labor,we will introduce the heterogeneous labor to "core-periphery" theory model so that the model can be closer to reality, then we will use relevant data of the real economy to validate the model, in order to explain the relations between the labor flow and regional income disparities;(3) by constructing a measurement model based on the theory of spatial economics, we’ll analyze the relations between geographic concentration of labor and regional income disparities to verify the conclusions of the theoretical model.According to the three problems and three objectives mentioned above, this paper makes a research topic of great theoretical and practical significance. Being based on spatial economics, inter-regional labor mobility is the core to this article. We want to explore the mechanism of mutual relations between labor mobility and regional income disparity. We want to seek empirical scientific evidence and demonstrate how to more effectively promote labor mobility and reduce regional income disparities. That can be helpful in practice in achieving a balanced growth of the regional economy.Specifically, the paper includes the following chapters:Chapter I:Introduction. Briefly introduces the research background, purpose and significance, research ideas and structural arrangements, as well as possible innovation and study limitations.Chapter2:literature review, the theoretical foundation and analytical framework. First, in order to understand the context and the current development of this research study, we summarize the existing literature on labor mobility and regional income disparity. Secondly, in order to grasp spatial economics overall, we describe in detail spatial economics from the theoretical aspects, which is the theoretical basis of the full text. Finally, on the basis of the existing research literature and spatial economics theory, we propose an analytical framework, namely inter-regional labor mobility as the core, studying its effects on the regional income disparity through the effects of cumulative causation circulation, which is the logical foundation of the full text.Chapter3:China’s labor mobility and regional income disparity. First, we use the relevant data from the inter-provincial movement of labor to analyze the character of inter-regional labor mobility; then, we compare the level of regional economic development from GDP and economic density.Chapter4:The model analysis on labor mobility and regional income disparity. In this section, we firstly extend the "core-periphery" model by introducing two kinds of differentiated labor-skilled labor and general labor. Through theoretical analysis and modeling, we can derive the conclusion which is a new4R equation with the formula expression. Followed by a simulation model, we use the Visual Basic programming language and computer simulation techniques to analyze possible equilibriums in three different initial distribution of the labor force. Then by using China’s economic data to estimate the initial distribution of the general labor force, we further analyze the model in order to explain the relationship between inter-regional labor mobility and regional income disparity. After that, we construct an econometric model based on spatial economic theory to test the effect of labor mobility on regional income disparity by using the panel data in the provinces of the country from2002to2011. Finally, we make spatial economics theory and economic reality of our country together to explore the relationship between labor mobility and regional economic rebalancing.Chapter Five:research findings and policy implications.Through this study, we have come to the following findings:First, through the research on status of labor mobility and regional income disparity, we found that the size of China’s mobile workforce increases every year, the proportion of inter-provincial mobility is also growing. Inter-provincial labor flow shows significant asymmetry. The coastal areas became a net inflow of population, which provide a lot of cheap labor for the economic development of coastal areas. Meanwhile, with the labor force subject to different levels of education, their flow shows significant difference. Compared with ordinary labor, the flow of high-quality talent is much full. As for the regional income disparity, national regional income gap is still concentrated in the income disparity among the eight regions, overall, it is mainly reflected in the income disparity between the coastal and inland areas. Therefore, given a huge difference in the absolute amount in the economic level between the coastal and inland areas, although the regional income disparity has reduced the momentum for the recent decade, to rebalance the regional economy is still.long way to go.Second, through the derivation of a spatial economic model with the two labor force, we find that the initial distribution of skilled labor determines the regional manufacturing share, and the manufacturing development determines the size of the local market. As general labor mobility is limited, the full flow of highly skilled labor will change the regional market share, leading to an expansion of regional income disparity. Moreover, the expansion of regional income disparity and labor mobility will form a self-reinforcing cycle cumulative causation chain.Third, by using the real data to simulate the spatial economic model, we find that, with the transfer of the labor of inland areas, firms gather in coastal areas, and the development of cluster industry conversely attracts labor, especially skilled labor to inflow continuously, which led to the loss of talent capital in inland areas and widening the income gap between the coastal and inland areas. That makes employment of inland areas more difficult, and more general labor will tend to flow into coastal areas, resulting in growing regional income gap.Fourth, the empirical research on labor geographic concentration and regional income levels can tell us that the flow of high-skilled labor significantly expands the regional income disparity, while the flow of general labor has a positive effect on narrowing the regional income gap to some extent, However, the positive effect cannot change the expansion effect on the regional income gap generated by high-skilled labor mobility.Fifth, the flow of high-skilled labor force expanded regional income disparity, but we cannot rely on labor mobility restrictions to reduce regional income disparity, which is neither to rebalance regional economy nor to take full advantage of the aggregation effect. Instead, the full and free flow of the labor force, especially the general labor force, will help to narrow the regional income disparity.