Abstract: Based on the survey data of peasant households in four counties （cities） of Hubei Province in 2013， the iterative three\|stage least squares （3SLS） method was applied to estimate the impact of labor migration on rural household operating income. The results showed that the outflow of rural labor force had negative effect on agricultural production income of rural residents and positive effect on their non\|agricultural production income. Remittances from migrant workers put a greater increase to the non\|agricultural production income， yet a sharp drop to the agricultural production income. The labor migration had a significant positive effect on rural household income， but this effect was mainly due to the increase in non\|agricultural production income. Compared to local workers， non\|local workers offered less financial support to their family but more promotion to the increase of non\|agricultural production income. Thus， it would be important to continue the transferred employment of rural surplus labor force to further increase farmers income and improve their living standard.

Key words: rural labor, labor migration, remittances, household income