Research On The Intergovernmental Division Of Social Security Expenditure In China

During the 30 years' reform and opening up,China's economy has a rapid development,Gross domestic product and financial expenditure is firm with an upward tendency,Social security is an important part of basic public service and function as the "shock absorber" of economic fluctuation,the distribution of income "regulator" and "safety net" of social stability.Establishing and perfecting social security system is not only the objective demand of socialist market economy and social fairness and justice but also the request for building a harmonious and stable society.Government is under an obligation to invest more money on social security.Since the reform of tax system in 1994,with the gradual increase in fiscal revenue,expenditure continues to sink,the local government shoulder greater pressure.The fiscal gap needs to be compensated by the central government by means of financial transfer payment.power and authority at all levels of government do not match and the social security expenditure on local government depend on transfer payment of central government excessively.whether or not intergovernmental division of labor is rational determines development of social security.The existed research shows that fiscal decentralization is conducive to the effective supply of social security,but it can cause the "Matthew Effect" that the rich get richer and the poor get poorer.Fiscal centralization is conducive to the equality of social security expenditure and bad for its growth,at the same time it may lead to "keep lazy" phenomenon.So this paper tries to answer the research question: how to divide the social security spending among governments,whether the division of labor to promote social security expenditure equally and increasingly.In order to solve the problems,this paper makes an in-depth study on the basis of basic public service equalization theory,fiscal decentralization theory by means of analysis of literature,comparative and empirical.We arrival at a conclusion from panel data of 31 provinces in China from 2007 to 2014 that the central government only undertakes 5% of social security expenditure,while the local has assumed 95% and depend on transfer payments,the division of social security expenditure in the government is conducive to the equalization of social security spending and bad for growth.Then this paper propose some suggestions that we can adjust the structure of fiscal expenditure,increase social security spending;clear the responsibility of social security between central and local;improve the level of transfer payment and balance the inter-provincial social security burden.The innovation and theoretical contributions of this paper are as follows: First of all,most of the research has been limited to the theoretical research on the financial responsibility of social security,This paper analyzes the social security expenditure from the perspective of intergovernmental division of labor between central and local government.The existed researches are limited to the single aspect of the equalization or growth of social security expenditure,and then we combine two dimensions of equal effect and growth effect to study social security expenditure.The shortcomings of this paper are as follows: Firstly,due to limit of data accessibility,the social security expenditure is restricted to central government and the provincial level and does not study the social security expenditure in the provinces,so the results may be incomprehensive.Secondly,we are unable to obtain specific data on the central transfer payment of social security expenditure within provinces,the dependency index the article select is calculated by methods of conversion,which may lead to inaccurate results.