The Impact Of Livelihood Fiscal Expenditure Of Government On Residents’Consumption Demand

Since the reform and opening up policy put into effect, domestic economy had made the sustained and rapid growth, but the low of the residents’consumption, high investment, low consumption and the economic driving mode of heavy reliance on export caused the unbalance of the macro economic structure and the inadequacy of economic development dynamic. Meanwhile, a large number of people’s livelihood issues like "difficulty in seeking proper education and health care" arose by the high housing, education, market reform of the medical, together with the lag of the supporting social security reform, made the increasing of the residents uncertainty expectation of the future, in order to deal with the future’s large disbursements, the residents have to deposit, which has weaken the residents consumption aspiration.In this context, this paper tries to theoretically analyze and empirically verify for the people’s livelihood’s fiscal expenditure and residents’consumption demand through improving people’s livelihood and promoting the consumption. First, theoretically expound the conduction mechanism of the people’s livelihood fiscal expenditure on the influence of the residents’consumption demand combining with our residents’behavior characteristics that constructed the theoretical model between the two sides. Secondly, based on dissecting on the status of the people’s livelihood fiscal expenditure and the residents’consumption development, empirical analyzing from two aspects which are the summation and the structure of the people’s livelihood fiscal expenditure.From the aspect of total perspective, this text selects the time series data from1978to2010and analyzes the government’s fiscal expenditure’s influence to urban and rural residents’consumption by using JJ cointegration and vector error correction model (VECM), and the results show that:(1) The total government’s fiscal expenditure produced a long-term balanced crowding-in effect to the urban and rural residents consumption expenditure, the increase of fiscal expenditure can promote the growth of urban and rural residents’consumption.(2) The crowding-in effect of people’s livelihood fiscal expenditure in urban residents’consumption is greater than that in rural residents. In the aspect of construction perspective, this paper selects out three parts including the education expenditure, medical and healthy expenditure and social security expenditure which are closely related to the living standard of the residents, using the Panel Data of28provinces (autonomous region, municipality directly under the central government) from2000to2010which is separated into two periods2000-2006and2007-2010, analyzing people’s livelihood fiscal expenditure’s influence to residents’ consumption through Panel Data, and the results show that:(1) Government education expenditure on the residents’consumption exists crowding-out effect.(2) Government medical and healthy expenditure’s influence to residents’consumption varied from significant crowding-out effect to crowding-in effect.(3) Government social security expenditure’s influence to residents’consumption varied from significant crowding-out effect to uncertainty.Finally, based on the above empirical analysis, this paper proposes policy recommendations from optimizing the financial expenditure structure, improving the basic public service, establishing a long-term mechanism of the fiscal expenditure etc. in order to achieve the goal of improving the people’s livelihood and promoting consumption.