Dynamic CGE Model and Simulation Analysis on the Impact of Citizenization of Rural Migrant Workers on the Labor and Capital Markets in China

Qi Wu,Hao Xiao

doi:10.1155/2014/351947

Abstract

This paper investigates the effect of the policy of citizenization of rural migrant workers on the factor market in a dynamic CGE model, which contains multiple dimensions of labor heterogeneity, a labor-lagged adjustment mechanism, and a dynamic investment mechanism. The simulation results show that changes in supply in the labor market will affect the labor market structure, the relative factor price, and the investment in and the output of industries.

Highlights

There have been large-scale migrations of surplus rural labor to cities in China
According to China’s 12th Five-Year Plan and data from the All-China Federation of Trade Unions (ACFTU) [31], this paper sets up the simulation scene of citizenization of rural migrant workers in phases and dynamically simulates and analyzes the effect of citizenization of rural migrant workers on China’s economic growth in the post-international economic crisis era from 2010–2020 (Table 1)
According to the CHINAGEM model simulation results, citizenization of rural migrant workers has a significant influence on employment and investment structure

Summary

Introduction

There have been large-scale migrations of surplus rural labor to cities in China. Benefiting from the demographic dividend of rural labor transfer, China’s economy has maintained a rapid growth rate of 9-10% per year. The policy of citizenization of rural migrant workers is the essential measure in promoting this urbanization because it can promote rural surplus-labor transfer, break urban and rural employment market segmentation, and solve the periurbanization phenomenon [6, 7] It can speed up the process of urbanization, expand domestic demand, and boost economic growth [8,9,10]. Mai et al [20] built a MONASH-style dynamic Computable General Equilibrium model of China (CHINAGEM) to estimate and explain its economic policies. We use the CHINAGEM model to explore and simulate the effects of the policy of citizenization of rural migrant workers in China on economic growth and structural changes in the labor and capital factor markets over a period of ten years from 2010 to 2020

Overview of the Model

Simulation Scene Design

Simulation Results and Analysis

Conclusion