Migration and Inequality of the Labor Market in China

Introduction
A. Purpose of Study
How does migration affect the labor market of China?
B. Rationale
Since economic reform in the late 1970s, the Chinese economic has been drastically developing. However, China is a classic example of what the Noble Prize economist Arthur Lewis suggests: “Development must be inegalitarian because it does not start in every part of the economy at the same time.” or of Deng Xiaoping’s blunt words: “Let some people get rich first.” As a consequence, a labor market in which people can pursue better jobs and higher wages in other provinces or cities has been developing since the late 1970s. Migration, which means people move out of their hometown and work in other provinces, becomes more and more common, especially from rural area (mostly inland) to urban area (mostly east coast cities), as it’s shown in picture 1. The emerge of this phenomenon dramatically changed the structure of labor market and result in inequality of different groups of labor force formed by migration, namely, Urban locals, Urban migrants and Rural migrants. It is important to understand the difference of these three groups and the employment situation of them so as to understand the changes of labor market and how does it happen.
Inequality is a side effect of many developing countries resulted from the rapid economic development, in China, particularly, between rural residents and urban residents. As we can see in tale 1, in 2011, the ratio of per capita disposable