Abstract: From the angle of market segmentation, this paper conducts an in-depth analysis of the paradox of the simultaneous expansion of labor force flowing and wage gap, as well as the “migration riddle”during the process of China’s marketization. It is believed that the regional division and the urban-rural division of the labor markets would inevitably lead to the wage income disparity between the workers; moreover, even if there is labor force shift, it could not restrain the wage disparity. This kind of labor market division caused by system preferences has played an important role in enlarging the wage income disparity of the workers. Therefore, it is essential to construct a nationally-unified and freely competitive labor market. So that this paper offers some related policy suggestions.

Key words: market segmentation; labor force shift; wages gap; system preferences