Abstract: Under the special background of dual labor market segmentation and the transition economies, this paper establishes a theoretical analysis framework based on the developmental neo-classical general equilibrium which includes foreign direct investment, human capital and transfer of redundant rural labor force. Theoretical research shows that FDI can change the equilibrium level of labor market by improving labor marginal benefit and labor supplies. Further empirical study finds that foreign direct investment has significant positive impacts on the transfer of redundant rural labor force. The effect in eastern region is significantly larger than that in central and western regions of China. The relationship between human capital and transfer of redundant rural labor force shows significant “U-shape”, the “threshold value” of idiosyncratic human capital in eastern region is 7.46 years, while that in central and western regions is 5.88 years. In order to solve the employment of redundant rural labor force and “secondary development” of labor resources, foreign industrial gradient transfer should be fully used in the context of economic restructuring, while “learning by doing effect” can accelerate the accumulation of human capital in the future.
Keywords: Foreign Direct Investment;Labor Heterogeneity, Transference of Redundant Rural Labor Force, System GMM Estimation
source:Finance & Trade Economics ,No.1,2013