Abstract This dissertation explores labor reallocation, migration and productivity growth in China theoretically and empirically. The labor reallocation, which happened between rural and urban sectors during the reform periods, contributes to the economic growth and this phenomenon is expected to be persistent in the future. The overall economic and productivity growth are supported by this continuous process of labor reallocation. Surplus labor has existed largely in the rural sector since the 1980s and needs to be reallocated to the urban sector. The initial question is whether China still has surplus labor in the last decade and if so, what is the quantity of this surplus labor? The surplus labor issue that is revisited is based on the empirical estimation using updated prefecture level dataset. Provided that there is still a considerable amount of surplus labor in the rural sector, rural farmers are faced with the dilemma of migration. A model of migration based on the efficiency wage theory is proposed in order to explain the migration decision making. Lastly, as China is a vast economy, it is necessary to analyze the labor reallocation in many sectors. A multiple-sector model is developed to explain the labor reallocation under the non-balanced growth path in the context of Chinese remarkable economic growth. Both empirical estimation and simulation are carried out to justify this model.