Based on data from 1978—2008 in Shaanxi Statistic Yearbook (2009) and the methodology used by Chenery for studying the industralization and economic growth, this paper analyzes the effect of rural labor shift in Shaanxi province and its contributions to GDP productivity and real GDP growth rate. The result shows that the effect of rural labor shift in Shaanxi province is relative significant and its contributions to GDP productivity and real GDP growth rate are increasing steadily. Therefore, this paper puts forward several institutional constructions, such as implementing system of residential place management; improving farmers’ employment skills and the income of migrant workers, establishing transfer of farmer’s contracted land and transfer of farmer’s homestead and performing old-age security system under the integration of urban and countryside.