The Impact Of The Fiscal Expenditure On The Income Gap Between Urban And Rural Residents In Zhejiang Province

Since35years of reform and opening up, the GDP of our country has beencontinuously increased on high-speed. The current our country has become theworld’s second-largest economy, the reform has made great achievements. However,with the rapid development of our country’s economy, the income gap betweenresidents seems to be constantly widening. Resident’s income gap in our countrymainly includes three aspects: the income gap between urban and rural, the regionalincome gap, the industry income gap. Among them, urban-rural income gap is mostobvious. Although the income gap between urban and rural residents has eased in theEleventh Five-Year Plan period, China’s income gap between urban and ruralresidents is still serious. By the end of2012, China’s relative gap between the incomeof urban and rural residents is3.5times. If the urban-rural income gap is too large, itwill do harm to the construction of harmonious socialist society. In order to solve theproblem of the income gap between urban and rural residents, the government shouldmake full use of its functions. The fiscal expenditure, as a means of governmentpolicy orientation, is very important to regulate income distribution gap. Based on this,this paper focuses on how fiscal expenditure affects the urban-rural income gap.The main research content of this paper is as follows:The first chapter is the preface of this paper. The preface introduces theBackground and Research Significance of this paper, Research Actuality, the mainresearch content as well as the main research methods.The second chapter is the theory part of this paper. It mainly introduced thetheory of income distribution and adjustment of finance for income distribution. Andanalysis the influence of fiscal expenditure on the income gap between urban andrural areas. The theory of income distribution mainly introduced the “Inverted Uhypothesis of Kuznets”. The theory about finance adjusted the income distributionintroduced the welfare economics and Rawls’s fair income distribution and so on.The third chapter and the fourth chapter is the focus of this paper. The thirdchapter analyses the present situation of the urban-rural resident income gap and thecauses of urban-rural income gap, as well as the basic situation of fiscal expenditurein Zhejiang province. The fourth chapter used the panel data model and selected the data in2002-2011from30counties and cities from Zhejiang province, studied therelationship between the fiscal expenditure and urban-rural income gap.The fifth chapter is the conclusion part of this paper, and puts forward thecountermeasures and suggestions.The conclusion of this paper has the following points: First, expand the economyspending will narrow the income gap between urban and rural areas. Second, increasethe spending of people’s livelihood will narrow the income gap between urban andrural residents. Third, the improvement of urbanization will enlarge the income gap ofurban and rural residents, the GDP per capital has no effect on the income gapbetween urban-rural resident. At the same time, the openness enlarged the income gapof urban and rural residents.Based on the result of empirical analysis, the author puts forward the measures tonarrow the income gap between urban and rural residents. First, arrange theeconomical expenditure reasonably and expand the spending in agriculture. Second,increase the social spending to improve the level of rural education and welfare.