This paper studies factors influencing rural-urban la- bor migration in China, particularly the implementation of rural cooperative medical insurance (RCMI) in the year 2003. With the support of data analysis from the year 2000, 2004 and 2006, clear linear correlations are found between gender, income, health con- dition and rural-urban labor flow, whereas the impact of education and employment status are more complicated. More importantly, results from regression show that the establishment of RCMI in countryside of China not only inhibits rural residents from seeking employment outside the village, but also pulls back rural people who have already worked in cities. When regional dimension is concerned, the pure composite effect of RCMI on rural labor flow is less significant in coastal areas with better economic perfor- mance and medical service.