A Study On The Effect Of China's Fiscal Social Security Expenditure On Residents' Income Distribution

Social security originated from the rise of common customs and philanthropy medieval European.In 1601 Britain enacted the "Poor Law",marking the government's entry into the field of social security,but also meaning a very close ties between Social Security and the State finance.After the recommendation of the Governmental legislation of the German Bismarck and Beveridge's report,making social security a respected Social Governance System in the Western countries,eventually becoming an effective means of relieving social fairness and justice,known as the social "safety net" and "Stabilizer".The distribution of income is the result of joint action in the market mechanism and government allocation mechanism.Since the market mechanisms follows the rules of priority to efficiency,so social unfairness on income distribution is inevitable,thereby affecting the social stability and economic development,creating a market failure which provides a reasonable justification for the government to enter the area of income distribution.Due to its natural properties of equitable distribution,social security acts as an effective means of government intervention in the distribution of income.Essentially speaking,social security is an income distribution system,and it reallocates the income of citizens through fiscal tax policy,in order to achieve the goal of social justice,adjust the income gap between the rich and the poor,and regional income gaps,and reduce social polarization.Thus,social security is necessary to intervene in the income redistribution,adjusting the income and wealth to achieve in social income distribution "fairness" and"justice."As the world's second largest economy,China is in a rapid economic development period,but income distribution gap is gradually expanding at the same time.In 2014 the Gini coefficient of income reached 0.469,which means 1%of the citizens occupied the 1/3 total property of the whole country.At the same time,China's urban-rural divided social security system made the gap between financial investment more distinctive,like 3/4 rural people enjoyed up to 1/9 financial transfer expenditure.Affected by regional differences in resource endowments,policy orientation,level of economic development,population and so on,Expenditure on social security faced more prominent issues in regional differences,thus affecting the formation of long-standing pattern of income distribution.During 2010-2014,Enterprise employees' basic pension insurance fund received an annual revenue growth of 12%,while spending of 18.6%,resulting a gap of 6.6 percentage points while urban and rural resident medical insurance fund received 2.5 and 5 percentage points respectively.In 2014,the National Social Security Fund get a revenue of 3.918646 trillion yuan,while spending 3.366912 trillion yuan,excluding financial subsidies of 844.635 billion,the fund income over expenditure.GDP growth declined from the past 10%to about 7%in New Normal period,which will inevitably lead to a decline of revenue growth in general public budget and social insurance fund.At the same time,the rigid requirements of social security benefits level which is easy to life but hard to drop make social security expenditures continue to expand.If not adjusted on protection policies,the current social security system defects and risks cause financial crisis to all levels of government and will affect the sound economic and social development,and eventually spread to non-virtuous cycle of the income distribution,resulting in reverse distribution expansion.From the current situation,the main problems are:Social Security expenditures produce a "reverse" effect on the income distribution,expanding the income gap;low overall level of social security limits the function of income distribution;the Social Security funding gap is expanding,making it difficult to product the adjust the potential of income distribution;longitudinal uneven distribution of social security expenditure results in "reverse distribution" between regions.Although the above problems can not fully reflect the impact fiscal expenditure produces on income distribution within the field of social security,but they are typical representatives.These major questions is arising from the "duality" of the rural-urban divide redistribution system,unbalanced inter-regional economic development,unclear social security expenditure responsibilities,poorly designed social security programs and other factors.If we let the origin of these problems be,both the longitudinal balance of society(between urban and rural areas)and the lateral balance(between regions)are difficult to grasp,inevitably resulting in a expansion of unfair distribution pattern,economic efficiency,but also the natural and social security fair,bad influence on economic efficiency,contrary to the embodiment of social security:justice and fairness.So the root of the current problems should be resolved in order to solve essential problems and development problems.To this end,China's"Thirteen Five" plan has clearly put forward sustainable,fair social security system,and gradually consolidate the personal accounts pension and basic pension achieve national co-ordination,begin to establish a set of Social Security benefits and regulation mechanism which take all the personnel interest into account,they are the objectives of the reform in the coming period.This means financial instruments as an important pillar of governance,play a key role,and social security which also serve as means by social security expenditure to balance income distribution play a fair and just role.Through a combination of qualitative and quantitative analysis,this article makes a comprehensive analysis of the impact of social security expenditure on distribution of income residents by comparative,normative and empirical analysis and.Its research boils down to the following aspects:Firstly,on the basis of combing the literature,we find that the impact of social security expenditure on income distribution of residents is hot issue,and many scholars have studied this problem,putting forward worth learning research methods and conclusions.But most of the results came from a point or an aspect,and single elaborate the effect social security expenditure on income distribution of residents,with no extensive research from a combination of micro and macro point of view on this issue,So it is single on the method,and the conclusion lack of more comparison and consideration.For this,the article intends to use the income gap coefficient,the Gini coefficient,Theil index,Panel Data to analyze influence social security expenditure and regional differences have on residents' income distribution gap.Secondly,theory for social security expenditure to adjust income distribution is expounded,the main content are,first,making a theoretical analysis of social security's public goods property and division of responsibilities.Second,social security's effect to balance income distribution mechanism is analyzed systematically.Third,social security expenditure's effect on equity and efficiency of the income distribution are described.Fourth,a descriptive analysis of measure method of inequality of income distribution is given.Again,starting from the present situation,urban-rural differences and regional differences as the starting point,we select the space and time two angles to horizontally and vertically compare the problems,and reason.This part is an important part of this paper,the main contents include:firstly,the introduction of social security to theoretically verify Gini coefficient and the income gap between urban and rural residents;secondly,using the provincial panel data during 2000--2005 to make empirical analysis of impact social security expenditure have on income distribution of residents;Thirdly,using Theil index to analyze the affect regional differences on social security expenditure have among urban(rural)residents;Fourthly,conclusions about quantitative analysis of social security expenditure's affect on resident income allocations.It concludes as follows:social security expenditure can narrow urban(rural)income gap,but expand the income gap between urban and rural residents,called reverse regulation.Regional differences in social security expenditure on the income gap in urban(rural)residents play a reduced role,which demonstrates improving the equalization of social security level is conducive to narrowing the income gap between residents of the region.Finally,some suggestions is introduced to improve the social security expenditure allocation,which includes the overall suggestions,the specific recommendations put forward by quantitative analysis,and during the new situation,new specific measures to strengthen social protection issues.Such as adapting to supply-side reform,playing protection role by social security expenditure though "reducing capacity ","deleveraging"," reducing inventory ","reducing costs","filling the short board".It is good time to seize the important opportunity for a new round of state owned enterprise reform,to solve the problem of past pension liabilities.With "precise pro-poor" policy support,social security expenditures play the role of regulator in all income groups.Based on these strategies and recommendations,with the relevant supporting system following up,it is necessary to abolish urban-rural dual structure,promote the pace of urbanization;standardize income distribution,strengthen the "high control","expanding medium" and "low lift" means of redistribution.