The Study On The Urban And Rural Resident’s Intergenerational Income Liquidity Under The View Of Government Public Expenditure

The increasing income gap of residents is a worldwide problem, China isalso facing with this problem as a rising developing country, and people beganto pay more and more attention to its inequality problem now.In previous relevant studies, the Gene coefficient almost becomes thegenerally held standards of measuring income distribution gap, in fact, this is asimplistic judgment. In recent years, a few scholars begin to analyze theinequality of income distribution from the new angle of intergenerationalincome mobility. What the Gene coefficient measures in a sense is the result ofinequality, but the intergenerational income elasticity is to measure theopportunity of inequality, Which is more crucial method than the Genecoefficient and other inequality index.After the basic study of intergenerational income mobility mechanism andgovernment public education and social security expenditure’s influencemechanism on intergenerational income, my article starts to use regressioncoefficient method, transfer matrix method and multilevel panel data model foranalyzing the resident’s intergenerational income elasticity and liquidity. Thesample data source is form the China Health and Nutrition Survey (CHNS), the"statistical yearbook of China" and the "China City Statistical Yearbook".The following are the main conclusion of the empirical analysis.First, the intergenerational income mobility becomes very slow, so theinequality of opportunity is also significant.Second, the urban residents’ intergenerational income mobility is slower and the income assignment unfair phenomenon is quite serious compared to therural residents.Third, after putting the variable of government public expenditure into thepanel data model, I find that expenditure on education, social security, andmedical treatment has different effects on urban and rural residents. The medicaltreatment index is more important to rural residents than urban.In view of these, my paper argues that we should establish a public policyframework emphasizing the equality of opportunity and make it to play aregulatory role on the income gap systematically. Particularly we shouldpromote fair educational opportunities and put more emphasis on fair startingpoint of income distribution; improve the tax and social security policy andenhance the government ability to regulating the income gap; synchronize thegovernment institutional reform and government function transformation, createa market environment for fair competition and promote the householdregistration system reform. To reform the existing income distribution system,current policy should focus on further improving the fiscal transfer payment andsocial security system, strengthening the occupation training in part areas, andmaking efforts to control huge income gap in a certain range.