An Empirical Analysis Of The Effects Of Social Expenditure On Residents' Consumption In Zhejiang Province

At the beginning of 1990 s,the rate of residents' consumption had bagun to deciline in China,and the average propensity to consume had been declining.The economic development model which has high investment and low consumption caused China's economic growth structure imbalanced.Lacking of social security and other related mechanisms resulted that contradictions in the field of people's livelihood has become increasingly serious.With the slowdown in economic growth,China's economy came into the "new normal" stage.Changing the mode of economic development and expanding domestic demand to achieve economic endogenous growth is the inevitable requirement of China's economic development at this stage.Only by developing the economy and attaching importance to the people's livelihood problems,seeking a sustainable development road giving consideration to economy and people's livelihood,can achieve our harmonious and rapid development.The improvement of the people's livelihood problem and the reform of the financial system created the people's livelihood finance,and have been playing a significant role for promoting the consumption of residents.However,due to the lack of clear definition of the people's livelihood finance,the local governments have more financial expenditure into the scope of people's livelihood financial expenditure.So the people did not have a profound understanding of satisfaction which the increasing people's livelihood financial expenditure brought.These problem are still the outstanding problem of people's livelihood,such as medical treatment,housing,etc.It is of great practical significance to study the impact of social expenditure on residents' consumption.As China's economic province,the total GDP of Zhejiang Province is 4648.5 billion in 2016.It ranks fourth,second only to Guangdong,Jiangsu and Shandong.Per capita annual living expenditure of Zhejiang Province is 25527 yuan,much higher than the national per capita consumption of 17111 yuan.Zhejiang Province has been taking the two-thirds of the financial resources into the people's livelihood for 11 years.The people's livelihood expenditure increased by 11.3%.The rate of consumer spending has not decline since 2004 and showed a steady upward trend after 2007.Zhejiang Province to improve people's livelihood more and more attention to this aspect of the financial expenditure is also expanding year by year.Therefore,the study of social spending on the impact of consumer spending,from the perspective of consumer spending,to explore the economic effects of social expenditure,not only has theoretical significance,but also has practical value.This paper mainly analyzes the effect of social expenditure on the per capita consumption of residents in Zhejiang province from three aspects: the empirical analysis of the total consumption of social expenditure by the data of Zhejiang Province from 2000 to 2016;the empirical analysis of social expenditure on the consumption of the whole household using the FE regression analysis,the urban residents and the rural residents;the empirical analysis of the social expenditure structure on the consumption using the panel data from 2010 to 2016.The conclusions are as follows.The social expenditure of Zhejiang Province has an crowding-in effect on the per capita consumption of residents.For every 1% increase in social expenditure,the consumption of residents can increase by 0.141%.And it is found that the social expenditrue's effect on the rural residents is stronger than on the urban residents.From the perspective of social expenditure structure,education expenditure and social security expenditure have the crowding-in effect on the all residents' consumption and on the urban residents' consumption,but it has no effect on the rural residents' consumption.Medical expenditure has a positive role to all residents Consumption.Housing security expenditure on urban residents consumption has a crowding-in effect,but on the consumption of rural residents is not significant.According to the analysis results,combined with the specific situation of Zhejiang Province,put forward the following suggestions.First,with the further acceleration of the urbanization process,the government needs to increase the total amount of social financial expenditure,and effectively solve the problem of new labor life.Second,the government needs to achieve equalization of public services,increase investment in rural social spending,making rural residents more equitably enjoy the modern dividend.Third,optimize the social expenditure structure,according to different consumer demand,targeted to increase social spending.Fourth,optimize the income distribution of urban and rural residents,narrow the gap between urban and rural areas,to achieve coordinated and sustainable development.