There exists interactive and cyclic relation among urban-rural income gap, rural labor employment transfer, and consumption. Both the consumption effect of narrowed urban-rural income gap and that of rural labor employment transfer are much significant. The urban-rural income gap will promote the rural labor employment transfer, which will in return narrow the urban-rural income gap; however, the enlarged urban-rural income gap will hold up the rural labor employment transfer. In addition, education level is the important factor that affects rural labor employment transfer and consumption.