The Influence Of China’s Fiscal Expenditure On Share Of Labor Remuneration

Since the reform and opening up, China made remarkable achievements becauseof rapid economy development in general. At the same time, the imbalance in thedevelopment process has become pronounced. From the perspective of incomedistribution, it is mainly because of primary distribution distortions in the distributionof national income, too much inclined to the government department and enterprise,income accounts for the proportion of ordinary workers continued to decline,long-term low income, labor remuneration continued to decline in the initialdistribution of proportion. Generally speaking, public expenditure should be theallocation of resources, promote economic growth and adjusting income distributionfunction. However, the scale of China’s fiscal expenditure increased year by year atthe same time, the distortions of the distribution of national income has not beeneased, but showing a trend of gradual deterioration. Therefore, the share of laborcompensation as the entry point of the study, designed to examine fiscal spending howto affect the distribution of national income, put forward a number of policyrecommendations, in order to achieve the common effect of fiscal expenditure toimprove the distribution of national income.From the point of view of the scale and structure of fiscal expenditure, the laborshare status, this paper analyzes the characteristics of the changes of fiscalexpenditure in China has some problems as well as the labor income share in recentyears. Then, the financial expenditure is divided into economic construction categoryof expenditure, expenditure on agriculture, administrative expenses, science andeducation spending four major categories to analyze the influence of different types offiscal expenditure on the labor share in theory, and the reality of the situation in China,to explore the effect of fiscal competition among local governments to share of laborcompensation. Based on the theoretical analysis, the paper further use of the systemGMM method, utilize China’s Provincial Panel Data to make a empirical analysis. Theresults show that, in the current structure of fiscal expenditure, the expansion of fiscalexpenditure have a negative effect greater than positive effect on the share of laborremuneration. Among them, the economic construction expenditures for miningenterprises transformation which are productive expenditure, administrativeexpenditure and the degree of government finances competition have a significant negative effect on the share of labor remuneration, expenditure on agriculture,Science and education spending have a significant positive effect on the share of laborremuneration. According to the research results, based on the imbalance problem thatat present our country expenditure structure exist, this paper puts forward a series ofpolicy recommendations from the perspective of optimizing the structure of fiscalexpenditure, in order to better play the fiscal expenditure in the national incomedistribution of the role of regulation, to improve the labor’s share of national income,realizing the fairness of income distribution.