Ⅰ. Introduction
“household responsibility system” initiated in late 1970s in rural China made farm households the residual claimants of their marginal effort, thus solving the long-standing incentive problems associated with the egalitarian compensation rules created in the commune system. At the same time, the price system of agricultural products was altered, stimulating the increase in farm productivity and releasing surplus laborers from agriculture. The higher returns to labor in non-agricultural sectors motivated farmers to migrate out of agriculture 1 .Since the 1980s, China has implemented, to varying degrees, reforms in different social and economic systems that are aimed at dividing up the urban and rural labor markets. These reforms have brought forth many changes such as relative relaxation in the hukou system, the building-up of a socialized welfare system for urban dwellers and gradual marketization of labor and employment. More and more peasants move from the farmland to non-agricultural businesses and enterprises in the countryside, or to those in small and medium-sized and even large cities……
