How Welfare Fiscal Spending Affects Urban-Rural Income Inequality

With China's economy sustained and rapid growth, people's living standard has a qualitative leap, but the income gap is gradually expanding in the process of economic growth. Income gap between urban and rural areas to expand not only influence to achieve the goal of common prosperity, at the same time, it is not conducive to the current "new normal" economy development request, so the income gap between urban and rural areas to expand the cause of it is necessary and put forward effective policy Suggestions.Based on welfare point of view, the government fiscal expenditures are divided into welfare spending and welfare spending, through horizontal regional level and vertical time level system to study the mechanism of action and influence of the income gap between urban and rural areas. Use of normative analysis and empirical analysis of the research method of combining quantitative grasp of welfare financial expenditure structure, is conducive to understand and analyze the causes of the income gap between urban and rural areas to expand and change trend, and based on this, advances effective and reasonable policy proposals, specific to see:First, this paper causes the income gap between urban and rural areas, welfare spending and income gap between urban and rural areas two aspects of the comprehensive combed the existing related literature at home and abroad, put forward the possible innovations, and provide theoretical support for the subsequent analyzing.Secondly, on the basis of clarifying the urban and rural welfare financial expenditure structure, the article theoretically analyzes the financial education, medical treatment, social security and welfare support agriculture spending four aspects of the mechanism of action of the income gap between urban and rural areas in our country, trying to make up the existing research emphasis on empirical research, theoretically analyses the defects of lack of system theory.Again, on the basis of normative analysis, the article analysis to select the appropriate index, and establishes the static panel data model and dynamic panel data model, mainly from two aspects: vertical and horizontal analysis. We enrolled in the study of regional differences in transverse fixed effects and the random effects model, in the study of longitudinal time difference we will sample period of time interval, and using dynamic GMM method(DIF- GMM and SYS- GMM) looked at different times of welfare financial expenditure to income gap between urban and rural areas.The results show that the welfare financial expenditure in our country in different time and area of the influence of income gap between urban and rural areas in bigger difference:First, the fiscal expenditure on education increased significantly narrow the income gap between urban and rural areas, social security spending increases the income gap between urban and rural areas have significantly expanded role, health care and financial support agriculture expenditure over time and area of different impact on the income gap between urban and rural areas have positive and negative effects; Two second, education and social security welfare both in vertical and horizontal two aspects of fiscal spending accounted for the influence of income gap between urban and rural areas is more big, health spending times, fiscal expenditures for supporting agriculture is minimal.Finally, according to the results the article put forward the corresponding policy recommendations: first, the government should tend to raise the level of overall education spending; optimize the structure of fiscal expenditure on education, particularly in rural areas; Second, the balance between urban and rural social security expenditure proportion, establish a more equitable and sustainable social security system. Third, from the point of view of regional effects analysis results that the government should improve the level of health care and support agriculture expenditure of rural residents.