Abstract
Since the 1978 economic reform, China has undergone a historical process of rapid urbanization. Although this process has been recognized as a key factor in the development of sustainable growth in China, low quality rural labor continues to limit the effectiveness of the country’s urbanization. Our study uses a spatial analysis framework to explore how the education level of rural laborers moderates the effect of urbanization on economic growth with provincial data collected from 1996 to 2015. Our results reveal that the influence of population urbanization on sustainable growth is mediated by the improvement of consumption capacity of urban dwellers and the industrial structural changes. The education level of rural laborers adjusts the urbanization’s influence on the consumption capacity of residents, which further affects economic growth. Empirical evidence indicates that the educationally limited rural population negatively moderates the impact of urbanization on sustainable economic growth by restraining the consumption capacity of migrating rural labor. It is also found that in some provinces with less-qualified rural labor, such as Gansu, Yunnan and Qinghai, population urbanization has not contributed to a corresponding economic growth, indicating that these provinces may have undergone urbanization without growth. These findings suggest that basic education is critical to the growth of income and consumption capacities of rural labor when laborers are migrating to urban areas. To achieve a valid urbanization process and sustainable growth, state and local governments must improve the basic education scheme, especially the nine-year compulsory education in Chinese rural areas through public financial investment and policy support.
Highlights
Since economic reform began in 1978 and since the mid-1990s, China has undergone rapid urbanization development, which has become an important engine of the country’s economic post-industrialization growth
The results indicate that population urbanization plays a positive role in China’s economic growth, which is consistent with previous theoretical analyses and empirical tests [4,20]
The main conclusions based on our empirical study are as follows: First, the influence of population urbanization on sustainable growth is mediated by the improvement of urban residents’ consumption capability and industrial structural change
Summary
Since economic reform began in 1978 and since the mid-1990s, China has undergone rapid urbanization development, which has become an important engine of the country’s economic post-industrialization growth. “China Urbanization 2.0: Super Metropolis” released by Morgan Stanley, forecasts that urbanization rates in China will reach 75% by 2030 [2] Both developed and developing countries have confirmed the positive impacts of urbanization on boosting domestic demand, supporting economic restructuring, and driving sustainable economic growth. China, which has a typical dual urban-rural structure, is undergoing a systemic economic transformation It is worth determining whether Chinese-style urbanization, characterized by urban population growth and rapid expansion of urban land, could effectively promote sustainable economic growth. Local governments push spatial urbanization in the form of land expropriation, which can greatly increase government revenue, attract private investment, and enhance infrastructure investment In this way, a local economy could have an impressive performance in a short period of time [3,4]. The population urbanization may result in more long-term changes in sustainable growth
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