Welfare Expenditure Impact On The Urban-rural Income Gap Structure

Since the reform and opening up, along with China’s rapid and continuouseconomic development, the income gap between urban and rural has becoming widen,which became urgent problem to achieve the "Two Hundred Years" target. In theory,local fiscal expenditure can largely reflects the government’s policy orientation, everyfiscal expenditure will affect the ability and opportunity to obtain income to varyingdegrees, and cause change of the income gap between urban and rural residents. Asthe local government expenditure has high controllability, clear urban-rural incomegap and expenditure of the intrinsic link, helping the government adjust the numberand structure of fiscal expenditure, effectively narrowing the income gap betweenurban and rural.Most existing studies consider the income gap between urban and rural as awhole, few researches on the internal structural problem. Based on the differentaspects of the income distribution perspective, the income gap between urban andrural income gap is divided into primary and secondary income distribution gap. Bycalculating the contribution of every income gap, we get the income gap betweenurban and rural effect on the direction and impact of the income gap in differentaspects of the income distribution. Grasping the structure of income gap betweenurban and rural quantitatively and accurately is conducive to analyze the causes andchanges in trends of income gap, and for the targeted problem solving is important.On the basis of clarifying the structure of income gap between urban and rural,weselect the welfare fiscal expenditure as a key study variables, analysis of fiscalexpenditure of education, health care, social security and agriculture support onprimary and secondary income gap between urban and rural between theory andimpact pathways, trying to explain the impact of welfare expenditure structure of theincome gap between urban and rural in theory, making up the existing literatureemphasis on empirical research and the lack of systematic theoretical analysis.We use theoretical analysis and empirical method to test the structural impactand mechanism effect of welfare fiscal expenditure on urban-rural income gap indifferent aspects of the distribution. Studies above show: in welfare fiscal expenditure,education spending has little impact on primary distribution gap, but expanding impact on secondary distribution gap; health spending widen both primarydistribution gap and secondary distribution gap; acting on operating income gap,social security spending expands primary distribution gap, but hasn’t positive effecton secondary distribution gap; acting on wage income gap,supporting agriculturespending not only widens primary distribution gap, but also narrows secondarydistribution gap.