Shanghai Fiscal Expenditure Impact On Employment, Labor Income And Distribution

The paper used2007input-output table of Shanghai to calculate the Employment Effect Coefficient to analyze the ability of industry to create employment. Then, the paper simulated the impact of two different fiscal expense policies on the employment, labor income and income distribution. On the basis of the "12th-Five-Year" Plan of Shanghai, the paper tried to give some policy advices on the fiscal policies. Shanghai should put subsidy policy on the agriculture industry to promote its modernization and industrialization. Shanghai should also subsidy some important and advanced industries in the secondary industry. Finally, for the third industry, Shanghai should use different fiscal policies according to the features of specific industry. Shanghai should use government purchase policy on culture, education and science research industries while use subsidy policy on finance and business service industry to low down their price. Those policies can help the Shanghai government to increase its employment, labor income and improve income distribution.