The Research Of Interaction Between Rural Labor Transfer And The Income Gap Between Urban And Rural Areas In Jiangsu Province

Transfer of rural labor is inevitable process of modernization in developing countries. Large-scale transfer of labor began in the 20th century, the early 90s in our province, which is particularly reflected in the transfer of rural labor to non-agricultural sectors of the agricultural sector Along with the rapid economic development, and gradually expand the scale of the transfer of rural labor force in Jiangsu province. At the same time the gap between rich and poor regions is still gradually expanding, the province’s Gini coefficient exceeded the international warning level of 0.4 from 2002. Whether there is the relationship between Labor and rural income gap, whether related policies can influence, they both arouse people’s attention.According to neoclassical economic theory and Lewis’ dual economic model, it can contribute to increase the transfer of rural labor and improve agricultural productivity in farmers’ income, thus inhibiting widening income gap between urban and rural areas. The reality and the appearance of some kind of theoretical departure from the province, this paper selected Jiangsu Province, theoretical and empirical analysis of the interaction and impact of the province’s urban-rural income gap between rural labor transfer and the reasons the province urban income gap.Firstly, the main findings of scholars in this field will be briefly explained. Secondly, analysis the relationship between the two by establishing theoretical model, empirical analysis with 1986-2013 Statistical data of Jiangsu Province. Theoretical analysis results show that the transfer of rural labor to non-agricultural sectors can improve rural incomes, thereby reducing the income gap, while the income gap between urban and rural areas can attract the transfer of rural labor force, they can affect each other. On the aspect of empirical analysis, Granger causality test indicated that they are Granger causality relationship. VAR model’s results show that the system of labor transfer and rural income gap formed at the long-term deviation from equilibrium, the two can be automatically adjusted to equilibrium. On this basis, rural labor transfer rate is the core variables, adding other control variables which affect the income gap significantly one by one, to build a multiple regression model to optimize the use of stepwise regression, the model’s results show that the transfer of rural labor force, economic openness, the proportion of primary industry of all employees, rural labor productivity and the first industrial output value accounted for a significant proportion of the gross regional product affect the income gap between urban and rural areas.Finally, gives relevant policy recommendations on the research results of theoretical and empirical part:promote appropriate transfer of rural labor force; changes in urban and rural economic structure, promote the integration of the town; promote the transformation of foreign trade development, promote industrial up grading.