Research On Urban-Rural Income Gap Based On The Perspective Of Financial Expenditure

Since the reform and opening up, with China’s economic boom and well-off society forward, the people’s living standards and quality has significantly improved. In2011, China’s per capita GDP exceeded5400U.S. dollars. China has already smoothly through the low stage of middle-income countries, into the high stage of middle-income countries which are more difficult and complex. However widening income distribution disparity impede that our country successfully span the "middle-income trap". In particular, the income gap between urban and rural residents has the highest contribution rate of the national income gap. And the reason why the income disparity between urban and rural residents is too large, not the high income of urban residents, but the excessive low income of farmers.Since1978-2010, the total level of income of urban residents and rural residents has been greatly enhanced, but the residents’ income distribution gap is growing. In2010, the absolute income gap between urban and rural residents reached the maximum of13,190yuan, the relative income gap (urban-rural income ratio) extended to3.23from1.82in1983. According to the relative income gap between urban and rural residents appears like a "W" specific change type, the period from China’s reform and opening up can be divided into four phases.That is1978-1984、985-1994、995-1998、999-2010,respectively, corresponding to the four trends "narrow-xpand-urther reduced-urther expansion ". The dynamic evolution characteristic of China’s urban-rural income gap is bound up with economic reform policies of the corresponding four periods.In view of the fact that urban-rural income gap is very large in China, there is necessary for government intervene in the income redistribution process, in order to effectively curb the trend of urban-rural income gap wider and promote social equity and harmony. In theory, fiscal spending is an effective economic instrument, which can directly or indirectly affect the distribution of property income. It also could increase the total social economic utility, promote fair and reasonable income distribution and enlarge social welfare. Put the financial expenditure as the starting point, which may narrow the income gap between urban and rural areas, to adjust the income disparity. Expenditure for supporting agriculture is to the benefit of agricultural development, rural prosperity and increasing peasant incomes. Expenditure on education is in favor of ameliorating the human capital endowment and improving the overall level of income. Spending on social security could transfer the income through income redistribution. Financial subsidies expenditure enhances agricultural production and promotes farmer additionally receiving. Although there is a difference in the mechanism of action and approach of adjusting the income gap between four fiscal expenditures, the final end-results are return to the regulation of income level.1978-2010data from the National Bureau of Statistics and empirical analysis shows that the four representative fiscal spending indeed have an important impact on the income gap between urban and rural residents, but the regulatory role of the expenditures on the income gap are diverse. The policy-type subsidy disburses significantly narrowing the income gap between urban and rural areas, however, the fiscal expenditure on agriculture、education and social security spending have actually expanded the income gap. Fiscal spending does not play a proper role in adjusting the income gap, which is closely related with their existing problems. The overall share of the proportion of typical fiscal expenditure in total fiscal expenditure is small; agriculture expenditure structure is irrational; differences in urban and rural education spending and social security expenditure, making the distribution of expenditures’benefits unequal; the pattern and structure of financial subsidies should be improved.Contrapose the problems of adjustment mechanisms of four representative financial expenditures, they can narrow the income gap between urban and rural residents from the following aspects. Ensure that the scale of financial support for agriculture, and optimize the structure of fiscal expenditure on agriculture. Increase the level of expenditure on education investment and plan in entirety for differences in urban and rural education spending. Improve the proportion of investment on the social security expenditure, and establish the social security system covering both urban and rural areas. Strengthen financial agricultural subsidies and optimize the structure of financial agricultural subsidies. Optimize the configuration of the scale and structure of government expenditure, so as fiscal spending effectively play the role in adjusting the income gap between urban and rural residents, to prevent polarization and achieve common prosperity.