Research On The Equalization Of Basic Public Spending: Based On The Analysis Of Benefit Incidence

Market economy develops to a certain stage when national wealth accumulats to a considerable level and the government gradually transforms the the core idea of the economic development to social services based on the basic roles of the market's allocation,the functions of governemt are to emphasize the social fair a,provide more equitable public goods,and achieve the overall benefits of the most people.The social development of our country encounter bottleneck constraints which has developed to a considerable degree.Social safety net including education,health social security and so on is an importan part of equitable distribution to maintain the well-being of the people,especially the vulnerable groups.The inequality of public resources allocation is bound to lead the vulnerable groups to lost developping opportunities,to hinder all members of society sharing the fruits of economic development,which will affect the sustainable economic development and social stability.There will be government interference by means of financial expenditure because that market configuration of resources would not achieve both efficiency and equity objectives,but cannot unify livelihood issues.The goals of providing public goods are to alleviate the serious problems caused by unequal market "competition and efficiency" and to prevent the expansion of income inequality.On the one hand,the methods to get fiscal expenditure to weak individuals are to manage the size,structure and direction of public expenditure.On the other hand,distribution of income level would provide a stable environment for economic growth,promote economic development,promote economic development to increase public expenditure.2008 Budgets draft of central and local goverment submitted in The 11 th National People's Congress second meeting in 2009 setted the people's livelihood expenditure total item and subitem for the first time.Government increasingly attaches importance to protect people's livelihood and to narrow the wealth gap.The expenditure has gradually increased.Compared to other subjects,how the rate of increase in basic public spending ? Wheather the stream of public spending is toward the poorer? Could residents therefore reduce consumption to increase savings and thus enhance the standard of living? This series of questions will relate to achieve to fulfill functions of public finance and public expenditure equalization which needs a rigorous analysis and validation.There is still room for improvement of public expenditure equalization research perspective and research methods in the academic field.Specifically,there are lacks of research of distribution equality between groups and single analytical tools have limitations.Thus,this paper will examine public spending equalization to a certain extent.The main object of study is the benefits equality of education,medical care and social security expenditures.The dissertation is organized as follows: Chapter1 introduces the research background,reviews the related literature and proposes research ideas.Chapter2 defines the basic concepts and the scopes of the public programs in our country and discusses the origin of equalization.Chapter3 describes the public expenditures and gives the basic facts using Statistical Yearbook.Chapter4 matches the macroeconomic fundamentals data with household survey datasets and measures the benefit incidence of basic public expenditures using costs methods.It presents the equality of benefits by dividing samples into different groups according to individuals characteristics and gives the benefits accumulation curves.Chapter5 expands research to province heterogeneous.The paper examines the targeting difference of public expenditures between poor and no-poor using panel data model.Chapter6 narrows the fields of research to medical care expenditures.Firstly,the paper discusses the effect of medical spending on household economic risks.Then,this chapter examine whether social security would defend against welfare reducing of households.Chapter7 presents the conclusions and the policy suggestions at last.The main conclusions of this paper are:(1)National expenditure grew faster than economic growth and there is a strong fiscal extractive capacity.Compared with medical care and social security,the larger investment amount of national fiscal is used in education spending.The proportion is 20%.The heaviest burden on local governments is medical care spending.Salary expenses in education funds decreased slowly from 2007 to 2013.The stipends for poorer students increased apparently.The funding per student varied distinctly in different school stages.In medical care funds,the medical expenses on members of society varied apparently too.And financial assistance for the social security fund expanded slowly year by year.China's basic social insurance achieved full coverage almost.But personal cost were large and quality medical resources were unevenly distributed.(2)According to BIH cost method,the paper measured the benefit incidence by income and expenditure and use the accumulation curve.There were concludes that compulsory education expenditure was progressivity and the low-income rural residents got the more benefit than urban in 2009.On the contrary,the non-compulsory education expenditure was regressive strongly.However,the basic features haven't changed more in 2011 and the benefit share to poor has increased slightly.Looking at the medical care expenditures,the high-income group got more benefit in urban.The public health spending in 2011 was more even than in 2009.The paper classified the samples by the characteristics of the head of household such as gender,education history,occupation and party.Households of which members in compulsory schools got more benefit than in non-compulsory schools when the heads were divided by occupation or education history.There were no differences whatever the heads are party members.But the benefit distribution of health spending was almost no relation with the heads' characteristics except for the gender of heads.The distribution was more uniform.(3)Using the measurement method based on the nested equation,we estimated the targeting differences between the poor and the no-poor over three categories of public expenditures with panel data of 7 years and 30 s provinces.The national difference of education spending was-460.62 yuan which means that the interests of the poor were damaged seriously.The targeting difference about public health spending was not significant and the average difference was 0.213 yuan.The result showed that the heterogeneities had little effects on the benefit incidence of public medical expenditures.The average targeting difference of social security and employment expenditures was 26.89 yuan and the provinces where the biggest differences existed was Shanghai and Beijing.We concluded that the poor could got more benefit from these fiscal spending.(4)Using the data from China Family Panel Studies(CFPS)carried out by the Institute of Social Science Survey of Peking University,this paper analyzes the effects of basic medical insurances on household consumption in urban and rural China.The DID-PSM estimates show that participating families would increase their annual consumption expenditure per capita significantly both in urban and rural,based on the counterfactual analysis.Moreover,basic medical insurance adds to a heavier burden on the medical care of rural residents.Basic medical insurance encourages the low income families in rural to increase their expenditure more than in urban.It was agreed that public health care resource was assigned equally and played roles to defend the health right and to share the economic risk.This paper estimated the vulnerability of household with 3-step FGLS regression.The vulnerability was adopted as the agent index of household welfare and the study estimated the effect of catastrophic health expenditures on household welfare using PSM method.The results were that the vulnerability of household would increased significantly if family members were in hospital.The rural families or low-income groups' welfare was affected more seriously by medical expenses than other groups.Domestic academic researches for public finance equalization have more substantial accumulation.But the most focused on the government's providing behavior or transfer payments which were not comprehensive enough because of there were no adequate datasets or systematic foreign references.In summary,we pretend to analyze the problem about the equity of public spending in a novel perspective of benefit incidence among individuals in China.Firstly,the paper valued whether the basic public expenditures are fairness the against the lack of differences among groups.We could conclude the distribution of public expenditure among different income,gender,region,occupation groups.All of that may be the part of the existing theoretical system.Secondly,taking into account the different excitation levels of government,the paper dig fully the existing database information using integrated data within different geographic regions to compare the kinds of impacts on public spending equity as the result of government actions and other potential heterogeneities.At last,when discussing the effect of public spending on welfare,we construct a counterfactual analysis framework using PSM method to estimate the economic risk of getting treatment and the effects of the basic medical insurance on the household's expenditure respectively.The PSM method could correct the adverse selection and omitted variable bias partly.