The Impact Of Human Capital Public Expenditure On Urban-Rural Income Gap In China

Over 40 years of reform and opening up,China’s economic development has achieved remarkable achievements and the income level of residents has been significantly improved.At the same time,however,the income gap between urban and rural areas does not tend to converge,but it shows the tendency of divergence.The large income gap between urban and rural areas is unfavorable to the sustainable development of economy and the stability and harmony of society.The theory of human capital believes that human capital is not only an intrinsic factor in promoting national economic growth but also an important factor in increasing personal income,which plays an important role in reducing income distribution inequality.In addition,due to the failure of the market in the field of income distribution,it is difficult to realize the fair distribution of income by market mechanism alone,so it is necessary for the government to correct it with "this tangible hand",taking into account efficiency and fairness.In particular,some expenditure items with the nature of public services,such as education,health care and other human capital public expenditure,have a positive impact on the accumulation of human capital and the improvement of rural residents’ income capacity,which is conducive to alleviating the widening of the income gap between urban and rural areas.Based on this,this paper,from the point of view of human capital,based on public expenditure,examines the formation of human capital public expenditure in the process of the formation of urban-rural income gap in China.Firstly,this paper will sort out the relevant documents at home and abroad,then define the connotation of human capital and public expenditure of human capital,and make theoretical analysis on the mechanism of the public expenditure of human capital affecting the income gap between urban and rural areas.Secondly,this paper analyzes the status of four dimensions of human capital public expenditure(education expenditure,science and technology expenditure,medical and health expenditure andsocial security expenditure),and analyzes the basic situation of urban and rural income distribution in various regions of China,in order to explore the problems existing in promoting the fair distribution of urban and rural income.On this basis,this paper selects 2.The panel data of 31 provinces from 2005 to 2017 are empirically analyzed,and the influence of four dimensions of human capital public expenditure,such as education,science and technology and medical care,on the income gap between urban and rural areas in China is discussed by using spatial econometric model.According to the results of empirical estimation,it is found that the increase of fiscal expenditure on education in China is not conducive to the improvement of income distribution between urban and rural areas,while the expenditure on science and technology,medical care and social security plays a significant positive role in narrowing the income gap between urban and rural areas.Among the three control variables,except that the estimated coefficient of regional openness is significantly positive,the per capita gross domestic product(GDP)and urbanization level of the region can significantly reduce the size of the city.The rural income gap,that is,the improvement of regional economic development level and the promotion of urbanization,can effectively reduce the inequality between urban and rural areas in China.At the end of this paper,based on the above analysis,some suggestions are given from four angles to promote the fairness of urban and rural income distribution.