Study On The Impact Of The Chinese-style Fiscal Decentralization On The Income Gap Between Urban And Rural Residents

China’s urban-rural income gap is highest in the world,due to the large number of China’s poor population is concentrated in rural areas,urban-rural income gap and study the relationship between economic policy,to narrow the income gap and to alleviate poverty in China is of great significance.The party’s18th report to the2020per capita income of urban and rural residents to achieve the goal of doubling, causing the community to discuss issues of income distribution, and also the gap draws more attention.To achieve the goal of doubling the urban and rural residents’ income must find the causes of the decline of income in order to remedy.In this regard,there are various academic explanations, but there still are deficiencies.There has been the idea that current financial system is the root cause of China’s income distribution,unfortunately,no further analysis of the financial impact of decentralization on income distribution and lack in the impact and transmission mechanism.Based on the full understanding and analysis of China’s urban-rural income gap on the basis of the status quo,based on the background of Chinese-style fiscal decentralization, the focus on theoretical and empirical research launched two aspects.Firstly,sum up incentives of local government’s under the Chinese-style fiscal decentralization. And analyze the behavior of local governments to select and supply of public goods preferences and their impact on urban-rural income gap,and build the framework of the financial impact of decentralization on income distribution and lack in the impact and transmission mechanism.Then,put forward the statistical decomposition on causes of the current main source of income of urban-rural income gap,and select Chinese-style fiscal decentralization indicators as explanatory variables to test the impact of urban bias education spending on urban-rural income gap.The study conclusions are as follows:Firstly,Wage income is the primary factor of urban-rural income gap.For urban residents, the wage income is the main source of their income.During2000-2011,wage income accounted for68.4%per capita disposable income of urban residents on average.For rural residents, the wage income is second source of family income.During2000-2011,wage income increased from31.2%to46.2%.Wage income differences contributed to urban-rural income Gini coefficient by85.44%on average.Secondly,human capital is the main reason for differences in educational wage income gap between urban and rural areas.The huge difference in educational attainment lead to huge differences between urban and rural residents in employment and wages.Judging from the urban and rural employment,rural employment is mainly engaged in low academic requirements industry.However,urban areas are mainly engaged in employment in higher education requirements industry,and as education levels increase,the proportion of urban employment has gradually increased.In addition,The total wages in urban areas are higher than rural areas.Finally,Chinese-style fiscal decentralization is the institutional reasons for differences in education human capital between urban and rural areas.As the city is the concentration place of wealth,capital,and other productive elements and sound infrastructure make the city’s economic development has a natural advantage,which drove local governments to implement urban-biased policies,caused rural human capital and the level of economic development fall behind the city,so that the income gap between urban and rural areas expanded.The innovations of this dissertation are as follows:Firstly,novel research perspective.Research on the impact of fiscal decentralization for rural income distribution are rare,so we built the framework of the Chinese-style fiscal decentralization on income distribution and constructed the impact and transmission mechanism.Secondly,building incentive mechanism for local governments under Chinese-style fiscal decentralization.This mechanism includes fiscal incentives, political motivation and personal income incentives,and we name it as growth-oriented incentive uniformly. Thirdly,analyzing the behavior choices for local governments based on game theory.In this dissertation,we built a model which shows the local governments’ vertical and horizontal game competition by absorbing ideas from game theory and yardstick competition,and pointed out that growth-oriented incentive mechanism increased game competition in the local government,city-biased supply of public goods and widen the urban-rural income gap.Fourthly,built the impact and transmission mechanism that Chinese-style fiscal decentralization impact on urban-rural income gap.We analyzed the impact of Chinese-style fiscal decentralization on local officials and city-rural income distribution.Then, by learning about the relationship between human capital and income distribution,we built a basic model that Chinese-style fiscal decentralization impact on the urban-rural income distribution. Finally,by taking government education spending for instance,we analyzed the effect that city-biased education pending impact on urban-rural income distribution.