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Based on new phenomena appearing in many emerging economies, this book presents a theoretical study on the economic influences of labor transfer from several aspects. In recent years, thanks to the continuous progress of social forms as well as science and technology, there are a large number of new developing trends in emerging nations. Taking China as an example, several economic issues have sprung up with the huge scale of labor transfer, such as development of modern agriculture, environmental protection, privatization of mixed enterprises, training of human capital, and migrant workers’ remittances to their hometowns. However, the existing researches on labor transfer pay little attention to them. In order to bridge the gap, this book combines new economic data with basic theories of labor migration, and discusses economic influences of labor transfer in four angles: human capital, migrants’ remittances, environmental protection, and development of modern agriculture. Each part is composed of two or three analytical elements. Our conclusions not only enrich existing theoretical researches, but also provide theoretical support for related national economic policies.



Chapter 1. Introduction

The term “emerging economies” has no single, exact definition. In the year 2010, the China Boao Forum for Asia defined the concept of 11 emerging countries (E11) for the first time. Among those countries, China, Brazil, India, Russia, and South Africa – also known as the BRIC countries – are relatively affluent, particularly in comparison to the world’s developing countries. According to data released by IMF, economic growth in developed economies in 2015 was 2.4%, while in emerging economies it was 4.3%. India, Russia, and Brazil, of whose GDP exceeded one trillion US dollars, have had seats in the top 12 economic entities of the world. Today, China, India, and Russia have contributed more than half to the economic global growth. Moreover, China’s economy scale is over $ 10 trillion, ranking second in the world.
Xiaochun Li

Human Capital


Chapter 2. Economic Analysis on the Urban–Rural Disparity in Human Capital in China

With China’s economic development and capital accumulation in the industrial sectors, the human capital level of the labors moving from the rural areas could no longer meet the demand of the industrial sectors. Therefore, “structural shortage of technical labor” emerged in the labor market as a result of excess of demand for high-skilled workers. Previous literature mostly focused on the relationship between rural human capital level and labor movement, income change, and economic growth, but in this article, the authors focus on the study of the relative disparity of urban and rural human capital and labor movement, as well as the effect of the change of urban–rural human capital gap on industrial output, profit, and social welfare. This article shows that bridging the urban–rural gap in respect of human capital level could not only improve the situation of the “structural shortage of technical labor” but also have a positive effect on the general social welfare.
Xiaochun Li, Xiaoying Qian

Chapter 3. Economic and Environmental Effects of Rural-Urban Migrant Training

In this chapter, we conduct the simple comparative static analysis of the environmental and economic effects of the government and producer services sector’s training of rural-urban migrants. We mainly focus our attention on environmental issues and reach the following conclusions: When the government lowers the interest rate of training loans, environmental conditions will worsen. However, when the producer services sector increases the unit cost of training rural labor, the opposite effect occurs, and environmental conditions will improve. In addition, we discuss the conditions under which a government reduction in the interest rate of training loans will lead to the reduction of pollution damage to agricultural production and a decrease in social utility.
Xiaochun Li, Yu Zhou

Chapter 4. Minimum Wage on Migrant Workers and Its Employment Effect: A Case Study of the Yangtze River Delta Region before and after the Financial Crisis

Based on the model of buyer’s monopoly, this article takes the Yangtze River Delta region as an example to analyze the employment effect of minimum wage on migrant workers. Empirical study of statistical data from seven cities in the region demonstrates that minimum wage could contribute to employment of migrant workers. With the impact of the financial crisis, market adjustment could disturb and destabilize the positive effect of minimum wage policies. Therefore, government should take active measures and interfere in the labor market to maintain targeted employment level and economic growth.
Xiaochun Li, Ping He, Yu Zhou, Zheyu Dong

Migrants Remittances


Chapter 5. An Economic Analysis of Remittance of Unskilled Migration on Skilled–Unskilled Wage Inequality in Labor Host Region

The present paper establishes a two-sector general equilibrium model and conducts the comparative static approach to investigate the impact exerted by an increase in the remittance rate of the unskilled migrants on the skilled–unskilled wage inequality in the labor host region. We find that the unskilled migrants increase their remittance rate to the labor-outsourcing regions that will decrease the skilled–unskilled wage inequality in the labor host region.
Xiaochun Li, Yu Zhou

Chapter 6. The Impacts of Rural–Urban Migrants’ Remittances on the Urban Economy

Much literature finds that migrants’ remittances have positive effects on the labor-outsourcing region; however, it should be noted that the massive funds outflow from the labor host region poses an impact on that region as well. Moreover, the existing literature sheds little light on the theoretical study of remittances within one economy. This article theoretically analyzes the economic impact of migrants’ remittances on the labor host region, the urban region, and establishes a three-sector general equilibrium model to investigate the impacts of an increase in remittances on wage, employment, and welfare level in the urban region from the short- and long-term perspectives. We find that an increase in remittances will reduce the output of the informal sector and decrease urban residents’ welfare in the short term, while it will increase the output of the informal sector and promote urban residents’ welfare in the long term.
Xiaochun Li, Dianshuang Wang

Environmental Protection


Chapter 7. Environmental Effects of Remittance of Rural–Urban Migrant

In this chapter, we investigate the environmental effect of the migrant remittance. The rural–urban migrant is an extremely important component of immigrant. Although they work and live in the city, the altruistic remittance affects the production scale of urban sector and then exerts impact on the environment. We mainly reach the following conclusions: the increase of the migrant remittance can improve the environment in the short term while worsen the environment in the long run.
Xiaochun Li, Jing Zhou

Chapter 8. Environment and Labor Movement of Skilled Labor and Unskilled Labor Between Sectors

In this chapter, we divide the labor into skilled and unskilled labor to investigate the impact that the heterogeneous labor transfer between sectors has on the environment under the international skilled and unskilled labor movements and the price change of the agricultural products. The main conclusions are: under certain conditions, skilled labor inflow deteriorates the environment, while its outflow improves the environment; unskilled labor inflow improves the environment, while its outflow deteriorates the environment; and the increasing price of the agricultural products improves the environment, while the decreasing price deteriorates the environment.
Xiaochun Li, Yuanting Xu, Dianshuang Wang

Chapter 9. Development Policies, Transfer of Pollution Abatement Technology, and Trans-boundary Pollution

In this chapter, we integrate intra-region labor migration and inter-region labor migration into the Harris-Todaro model in the presence of unidirectional trans-boundary pollution. We conduct a simple comparative static analysis of regional economic and environmental effects of the central government’s development policies on two regions, reducing the transfer cost of inter-region labor migration and increasing the capital subsidy to the less developed region. In addition, we compare the environmental and regional economic effects of the transfer of pollution abatement technology in two regions.
Xiaochun Li, Yu Zhou

Modern Agriculture


Chapter 10. A Study on Urban Private Capital and the Transfer of Labor in the Modern Agricultural Sector

As urban private capital enters the modern agriculture industry, it divides the agricultural sector into the modern sector and the traditional sector. This chapter establishes a general equilibrium model to study the economic impact of governmental policies aimed at promoting modern agriculture. The main conclusions of this chapter are that interest subsidies implemented by the government to promote modern agriculture can reduce the transfer of labor from the rural areas to the cities, but encourage the movement of rural labor to the modern agricultural sector. Conversely, wage rate subsidies for the modern agricultural sector will lead to rises in the urban unemployment rate and a decrease in the quantity of labor in the traditional agricultural sector.
Xiaochun Li, Qin Shen

Chapter 11. Analyzing the Effect of Advanced Agriculture Development Policy

This chapter broadens the scope of current theoretical studies, divides rural agriculture into two sectors—advanced and traditional—and takes into consideration the land factor and the urban informal sector. Under the assumption that wages in the advanced agricultural sector are higher than in the traditional agricultural sector, this chapter analyzes the effect of policies to promote advanced agricultural development with the comparative static method. The main conclusions of this chapter are wage subsidization of the advanced agricultural sector, in addition to having the same economic impact as interest subsidies on the advanced agricultural sector, could also increase the land employment in the advanced agricultural sector, and reduce that in the traditional agricultural sector. Therefore, the effect of wage subsidizing policies is stronger than that of interest subsidies, while land rent subsidies for the advanced agricultural sector have the same economic effect as wage subsidies.
Xiaochun Li, Qin Shen, Chunlei Gu, Meng Ni

Chapter 12. Unemployment, Wage Inequality, and International Factor Movement in the Presence of Agricultural Dualism

This chapter investigates how the international factor movements affect the unemployment and skilled–unskilled wage inequality with the existence of a modern agricultural sector. Our research has the new feature that we not only consider that the rural labor migrates to the urban sector but also to the modern agricultural sector. The main conclusions are that the unskilled labor outflow certainly decreases the wage inequality and unemployment rate and the influences that skilled labor movement and capital inflow have on wage inequality and unemployment rate are dependent on the factor intensity between the urban and modern agricultural sectors.
Xiaochun Li, Yuanting Xu

Chapter 13. Environment and Economy in the Modern Agricultural Development

This chapter establishes a three-sector general equilibrium model to investigate the environmental and economic effects of policies intended to promote modern agriculture. In the model, two situations are considered: in the first situation, the perfect mobility of capital between the capital-consuming sectors is assumed, and in the second situation, there is perfect mobility of land between the land-using sectors, keeping perfect mobility of capital assumption unchanged. The main conclusion is that the environmental effect of interest subsidization for modern agricultural sector is superior to other subsiding policies of factor prices.
Xiaochun Li, Yunyun Wu
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