The Correlation Analysis Between Fiscal Expenditure On Social Security And Households’ Consumption

Since the reform and opening up, China’s national economy sustained rapid development and the income of residents increase. But the development of this reliance on investment and exports in the context of the financial crisis highlights the drawbacks, Affected by the financial crisis, foreign demand reduce Significantly, Serious decline in exports, Build a consumer-led economic growth is put in a more prominent position. The party’s and18’s "two to improve with two synchronized, Income growth and economic development synchronization, labor compensation growth and labor productivity synchronization, national income distribution in the proportion increasing household income, Improve the proportion of labor remuneration in primary distribution. Improve the middle class, build a consumer-based economy so that the fruits of development more inherent requirement of the broader benefit of all the people. The eighteen proposed social security system is to protect people’s lives, a basic system of regulating social distribution, reflects the important impact of Social Security on income distribution, as well as residents’ income and consumer.Social Security fiscal expenditure affect households’consumption including social effects, economic effects and income distribution effects. Economic effects include savings effect and retirement decisions. Income distributional effects, including the effects of income distribution effects and intergenerational inter generational income distribution. This article analyzes the effect of the intergenerational savings effect and its economic effects of the income distribution effects of income distribution. Social Security savings effect analysis showed that household savings, reduction in social security to improve residents’consumption; For most of the results of the Social Security intergenerational income distribution effects positive regulation Social Security income distribution to narrow the income gap.As important factors affecting consumer spending, social security affect household consumption through a variety of ways. This paper selects the Social Security financial impact of fiscal spending on consumption and social security expenditure by income distribution directly affects consumption path analysis. Tn this article, the former use of the data for social security urban low expenditure in fiscal spending, The latter to use the data for the local finance social insurance fund expenditures. In the statistical analysis of the first path, I assume that urban residents entitled to all of the expenditure used to increase the city according to the disposable income of the lowest income households Income Quintile residents,urban low expenditures on income distribution was measured by the Gini coefficient calculated. In the empirical analysis, select the Gini coefficient as instrumental variables. Social Security financial expenditure in the urban low spending on local income distribution in the first stage of the regression analysis, this indicator Gini coefficient instead. In the second stage regression analysis of the impact of changes in income distribution on household consumption, the results showed that the Social Security financial expenditure in the urban low spending a significant positive correlation with the local consumption, The over identification test show after the reunification accept Tool variables Gini coefficient is exogenous original assumptions. In the empirical analysis of the second path, the control variable local finance social insurance fund expenditures and consumption of local residents is also a significant positive correlation.In the policy recommendations section, I make policy recommendations on social security insurance fund for financial assistance and social security, social assistance spending. I recommend social assistance expenditures for social relief projects; establish social relief fund compensation mechanism for co-ordination currently split.