Abstract: Under the background of household registration system reformation, agglomeration economy has led to the flow of large scale rural labor to the city by pecuniary externalities and technological externalities, which are complementary in explaining agglomeration effects, promoting the process of urbanization in China. Through forward and backward linkages in the industry, pecuniary externalities affect rural labor mobility by means of the function of price; technological externalities influence the spatial distribution through the knowledge spillover gotten by labor sharing, communication and learning. The theoretical analysis and measurement test show there is U-shaped relationship between pecuniary externalities measured by market potential and the rural labor mobility scale, there exists “∽” shaped relationship between technological externalities measured by city population and rural labor mobility scale, and in the two kinds of power game of “agglomeration - Household Registration”, urban agglomeration dominates China′s urbanization. Thus it is still the foundation of realizing the goal of urbanization in China to explore the reform of the household registration system and make good use of agglomeration economies in the future.

Key words: rural labor mobility, urban agglomeration economies, pecuniary externalities, technological externalities, household registration system