Research On The Influence Of Local Government Debt On Income Distribution

Since the beginning of the founding of new China,the local government debt system has gone through six institutional reforms.However,the local government debt system is closely related to people's livelihood issues in China,which mainly affects the real economy by affecting the capital market to change the pattern of residents' income distribution.Therefore,the study of the relationship between local government debt and income distribution is instructive to the improvement of people's livelihood in China.This paper first use Jong Il-You * and Amitava Krishna Duttf(1996),the income distribution of related theory,analysis of government debt and the possible relations of income distribution in the short term and long term,to consider geographical,and economic development level,the 31 provinces in China is divided into four economic regions,and by using the provincial panel data from 2008 to 2017 different areas of local government debt and the empirical study on the relationship between income distribution,the distribution of income is to use disposable income and the gini coefficient in two ways.Combined with theoretical analysis and empirical research,this paper mainly draws three conclusions: first,on the whole,government debt worsens household income distribution to a certain extent,mainly because the tax effect of government debt exceeds its income effect;Second,the same change of government debt scale in different economic regions has different effects on income distribution.In the eastern region,the expansion of government debt improves the distribution of residents' income,but has no significant effect in the central region,while in the western region and northeast region,it worsens the distribution of residents' income.Third,the impact of local government debt on income distribution in China may be non-linear.The government debt and gini coefficient in eastern and central China have a "u-shaped" quadratic regression curve,and the coefficient of government debt balance is significant.However,the government debt and income distribution in the western region and the northeast region presented an inverted u-shaped quadratic regression curve.Therefore,whetherthere is a deteriorating relationship between government debt and income distribution is not only geographically different,but also non-linear.