Spatial Econometric Analysis Of The Impacts Of Labor Mobility On Chinese Regional Economy Convergence

China is a country with a large population, based on the theory of Heckscher-Ohlin theory, so taking full advantage of labor cost is the way to get comparative advantage. But traditionally, household registration system, social security system and the long distance between provinces make labor mobility being difficult. There are mismatch of labor not only in the different industries, but also in different zones. The markets get more open, and the labor market was getting liberal, Because of Chinese economic reform. Relaxing the restriction of the policy and increasing the efficiency remove barriers for the labor mobility. After Chinese economic reform, there are differences between the economic structure of the eastern region and other regions, the regional economy had become binary structure. During this period, the influence of the labor mobility on the regional economic convergence and the existing problems are becoming a growing concern. For the effects of the labor mobility, some research presents that labor mobility can reduce the disparities between difference provinces, and some research prove labor mobility is not the way to reduce the disparities. Labor mobility can bring labor into the zones to reduce the cost of labor.In the provinces of labor-out, this phenomenon eases employment pressure, but making the lack of labor decreases the spending power in this area. So, this is imperative to study the labor mobility’s effects to the disparities between difference provinces.This paper from the view of the theory about labor mobility and New Classical Economics is the base of empirical research. From the macro and micro perspective, the mechanism of labor mobility is used to explain the diversity of the causes of labor mobility, and the role of labor mobility on economic convergence. The convergence of the economic theory is the second part of the theory base. New Classical Economics is the base of beta convergence, which is theory support of empirical analysis. The Theory of Endogenous Growth points out that the cost of innovation is the reason of economic convergence. Analysis has shown that in the case of labor mobility, except for the central region, the conditional beta convergence rate in each region has slowed down, and the labor mobility becomes the convergence effect on the regional economy. The investment of capital is stable motive to the economic growth. The adjustment of fair distribution of urban and rural income is also the motive to the economic growth, except of the eastern region. Then, making use of index measure the disparities of different provinces, such as, Theil index. In the spatial panel ground, the paper use Beta-index and economic convergence method to test the convergence of provinces economy by using of data from 2000 to 2013.The results of Moran’s I test support the spatial autocorrelation of the model. The concrete form of the model is decided with the results of LM-test. Finally, the paper gets the conclusion and provides suggestions.Through the empirical analysis, the paper prove that there is conditional beta convergence in provincial economy in our country. On the basis of the conclusion, the paper puts forward some suggestions, such as:improving the social security system and employment security system, setting up the cross-regional labor mobility registration system or periodic surveillance system and the adjustment of industrial structure, etc.