The Impact Analysis About The Fiscal Structure To The Urban-rural Income Gap

Since Chinese reform and opening up, the rapid development of national economy,people’s living standards gradually improve. At the same time, the income gap betweenurban and rural areas is gradually widening, income gap between urban and rural areashas become the focus of academic and policy circles. The income gap between urbanand rural areas in general may lead to a series of economic and social problems, thegovernment is working to narrow the income gap between urban and rural areas.Therefore, the study of the income gap between urban and rural areas is of greatsignificance.Fiscal expenditure has a positive role to income growth, but different projects offiscal expenditure has different effect between disposable income of urban residents andnet income of rural residents. Fiscal expenditure is through the different influence ofdisposable income of urban residents and net income of rural residents to affect t heincome gap between urban and rural areas. Fiscal expenditure policy is the most directand effective means for the government to adjust income distribution. Therefore, studyrelationship between fiscal expenditure structure and the income gap between urban andrural areas could help the government adjust the structure of fiscal expenditure to dobetter to narrow the income gap between urban and rural areas.This paper has been divided into five parts for research. The first part is theintroduction, this part will state the selected topic background, research significance,research purpose, research methods, research content, the innovation of the research,and elaborates the shortage. The first part is the introduction, to the selected topicbackground, research significance, research purpose, research methods, research content,the innovation of the research, and elaborates the shortage. The second part has statedthe domestic and foreign research status and related concept definition, the part ofdomestic and foreign research status analyze from the national macroscopic policyinfluence on the income gap between urban and rural areas and fiscal spending toanalyze the influence of income gap between urban and rural areas, and the part ofrelated concept definition will describe concepts of the income gap between urban andrural areas and fiscal expenditure. The third part will describe the relationship betweenthe fiscal expenditure structure and the income gap between urban and rural areas. firstof all, paper will introduce some theories such as Welfare Economics Theory, MeadTheory and Marxist Theory, then introduce the relationship between the fiscal expenditure structure and the income gap between urban and rural areas. The fourth partintroduce the empirical study about the relationship between the fiscal expenditurestructure and the income gap between urban and rural areas, first of all, author willintroduce data source, the selection of indicators show the characteristics of panel data,the panel model, then use Stata software and panel data of31provinces in China from1998to2012to do empirical analysis.The fifth parts will introduce the policysuggestions based on theoretical analysis and empirical analysis of the above.Through research, this paper draws some conclusions. First, urban-rural incomegap has become more and more serious. The government should attach great importanceto it. And larger income gap between urban and rural areas is mainly due to the lowincome of rural residents. Second, fiscal expenditure for supporting agriculture in thecentral and western regions can narrow the income gap between urban and rural areassignificantly, but fiscal expenditure for supporting agriculture in the eastern region haswidened the income gap between urban and rural areas, and the effect is not significant.Third, education spending of nationwide has significantly widened the income gapbetween urban and rural areas, this is mainly due to The Urbanization tendency ofeducation expenditure of urban and rural areas, so that education expenditure has a largedifference between urban and rural areas. Fourth, the social security expenditure of theeastern and western regions significantly narrow the income gap between urban andrural areas, but the positive effect is not obvious in the east areas. Fifth, health careexpenditure of the eastern part significantly narrowed the income gap between urbanand rural areas, the health care spending of the central region don’t have positive role innarrowing the urban-rural income gap. While the health care spending in the westernregion has widened the income gap between urban and rural areas. In China, first, TheUrbanization tendency is serious, it has been a huge impact on the income gap betweenurban and rural areas. Fiscal expenditure for supporting agriculture, education spending,social security expenditure and health care expenditure have different effect on theurban-rural income gap in different province. This is closely related to the expenditurestructure. So it is necessary to adjust the spending of urban and rural distribution andstructure. On the basis of the six conclusions, author put forward the correspondingpolicy recommendations.