An Empirical Study On The Relation Beteween Local Taxition Policy, Structure And Economic Development

Since1978, China has reformed the social security system and graduallyconverted the original insurance business into the social insurance. Since the late70s,the rapid economic growth has aroused attention, and conducts a variety of reforms.That the central government made its fiscal power decentralized is considered animportant factor for the great contribution of the economic growth. However, thisresulted in inter-regional competition, and also makes the various inter-regionaldifferences in economies of scale generated. With the structure of aging population inChina, the social security expenditures is always a major expenditure items for thelocal governments, even though the local financial burden, but whether affected bythe development of the regional economy? From the research and thesis ofdevelopment economics, it can be found that there are two different conclusionsbetween the impact of social security expenditure and economic scale; As for China,there is also a polar conclusion.This article is in order to explore how Chinese social security expenditure isaffected by the regional economic scale differences of different provinces. We willtake advantage of Chinese provincial-level tracking data for analysis of regionaleconomic scale differences on social security expenditure. By reviewing the currentliterature, this paper will establish a more complete framework for the econometricmodel for the various effects of social security expenditure variables. In addition, thisarticle will also make a clear introduction to the current Chinese social securitysystem and the history of its development, and identify the problems confrontednowadays. Finally, considering the basic pension and basic medical expendituresaffected slightly by different factors, the paper has established two kinds of empiricalmodels, to further study the different expenditure by economic differences in respectof the impact of the development scale. Sorting out how social security expenditureimpacted by economic scale, which is subject to the government’s reform as areference.