The Study Of The People's Livelihood Finance's Impact On The Income Gap Between Urban And Rural Residents

The 13th Five Year is the decisive battle period that builds a well-off society in an all-round way, one of the goals of building a well-off society in an all-round way is to narrow the gap in come distribution. But by 2015, the residents income inequality is still prominent, so the government will attach great importance to the residents' income distribution adjustment.The method of adjusting the income gap between urban and rural areas in term of government is to use the structure of fiscal revenue and expenditure. Therefore, this paper using the combination of qualitative and quantitative analysis method to study the relationship of the people's livelihood financial revenue and expenditure and the income gap between urban and rural areas based on the 31 provinces in order to reveal the effects about the present rural bias of financial revenue and expenditure adjusting urban and rural income distribution.The second chapter of this paper overall grasps the relevant research status of fiscal, the income gap between urban and rural areas and the spatial panel model. The third chapter introduces the related theory and the method. The fourth chapter firstly analyzes the present situation of the people's livelihood finance. According to Cobb-Douglas production, this paper infer the mechanism of the rural bias the people's livelihood of financial impact on the income gap between urban and rural areas from the theoretical aspects.This article selects the ratio of urban and rural residents per capita income and Theil index as explained variable. education, health care, social security expenditure and indirect tax revenue as explanatory variables, real GDP per capita, urban and rural per capita investment in fixed assets ratio, the proportion of imports and exports and the proportion of urban residents as control variables based on 2002-2014 and 31 provinces panel data. This paper finally chooses double fixed effects space lag model and analyzes the influence of independent variable on the dependent variable from two aspects of direct effect and indirect effect.Model estimation results show that the income gap between urban and rural areas of spatial lag under the 1% significant level is positive, accounting for the income gap between urban and rural areas level between China's 31 provinces have obvious positive spatial correlation. The expenditures on education and social security under the 5% significant level are negative, that both have promoting effect to narrow the income gap between urban and rural areas, as a result of the existence of learning effects, the two expenditures have spatial spillover effect to the neighbouring, their effects are negative, they reduce the neighbouring income gap between urban and rural areas. Medical expenditure on health and indirect tax revenue under the 5% significant level are positive, that both play a role of widening gap, possible reason is that spending on investment and rural bias is not strong enough. Both spatial spillover effects are positive, indicating that they have a promoting effect on widening the neighboring income gap between urban and rural residents. As for control variable, the direct effect and indirect effect of economic opening degree and urbanization under the 5% significant level are negative, they play the role of narrowing the income gap between urban and rural areas both in this province or in neighbouring. The two of Capital gap between urban rural per capita substances and economic development level under the 10% significant level are significantly positive, they widen the income gap between urban and rural areas either in this province or in neighbouring.Based on the results, this paper suggests that government can try to narrow the income gap between urban and rural areas in China from three aspects:firstly, maintaining optimize the rural bias of financial expenditure on education and social security class; secondly, focusing on increasing the rural bias fiscal expenditure scale of health care and needing to reform health care; thirdly, gradually reducing the indirect tax revenue proportion and raising the proportion of direct tax revenue.This paper has three main features on the variable selection and the research mentality:firstly, this paper chooses the fiscal expenditure in education, health care and social security expenditure at the same time to analyze its impact on the income gap between urban and rural areas, this avoids the integrity of the spending will hide individual spending actual effect; secondly this article will systematic study fiscal expenditure and income at the same time on the influence of income gap between urban and rural areas; thirdly this article uses the spatial panel model to analyze the relationship between the people's livelihood finance and urban and rural income gap.