Research On Modulating Income Disparities In Jiangsu Province

Social Security (SS) is a means of income redistribution, which is important to narrow the income disparity and maintain social stability. In recent years, the state has actively promoted the construction of social security system and made great progress in coverage rate and treatment. The New Rural Endowment Insurance (NREI), New Rural Cooperative Medical Insurance (NRCMI), Old-age Insurance for Urban Residents (OIUR) and Medical Insurance for Urban Residents (MIUR) have been put into practice across the country. NERI and OIUR are integrated into Urban and Rural Endowment Insurance (UREI). The reform program of Civil Servants Endowment Insurance (CSEI) is carried out formally. The standard of subsistence security and the basic pension for enterprise retirees are raised year by year. However, SS broadens income disparity. How to make social security work well in narrowing income disparity is an important issue that we face, especially in the social contradictions and social transformation period.Taking Jiangsu Province as an example, this paper uses comparative research, literature research and statistical analysis method to analysis the relationship between SS and income disparity. Clearing relevant policy, I sum up achievements which Jiangsu Province has made in SS, such as coverage rate, treatment, financial support, system integration and innovation. Through establishing a model, I analysis how social security affect the income disparity between urban residents and rural residents in Jiangsu Province. Then, drawing a conclusion that SS enlarge the income disparity in urban residents and urban-rural residents while narrow the income disparity in rural residents. Combined with per-capita SS income in proportion of disposable income (or net income) and the growth rate of social security income, I estimate SS can continue to narrow the income disparity of rural residents and gradually reverse the retro regulation situation in urban areas, but the narrow-income-disparity effect will be restricted and challenged in the future with the rural social security system gradually perfect.Statistical analysis showed that the social security doesn’t affect the income gap well in Jiangsu Province. The low proportion of fiscal expenditure on social security, the treatment variation between urban and rural areas and different industries, unreasonable construction of SS etc are the main cause of the situation. Comparing SS policies’efficiency in several countries, which are divided into three groups, I summarize universal experience useful to the practice in Jiangsu. I believe social security will narrow the income disparity better by increasing fiscal spending, raising management hierarchies, improving inner structure, promoting employment.