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The Influence of the Financial Expenditure on the Income Gap between Urban and Rural Residents in Shaanxi and the Strategy Choices
Pages: 65-71+85
Year: Issue:  10
Journal: Xi'an Finance

Keyword:  fiscal expenditureeconomic growthincome gapstate treasury;
Abstract: At present, the income gap between urban and rural residents is expanding increasingly. The reasons leading to this phenomenon are various, and one important aspect is the fiscal expenditure. As an important means for the government to regulate and distribute the income, can the fiscal expenditure effectively promote the growth of urban and rural income and improve the situation of the increasing expanding of the income gap? From the angle of the state treasury, selecting the actual data of Shaanxi from 1978 to 2015,using cointegration test and impulse response function and other methods, the paper makes an empirical analysis on the impact of Shaanxi’s financial expenditure on the income gap between urban and rural residents. The results show that the economic growth and the fiscal expenditure levels both significantly widen the income gap between urban and rural residents and lead to the deterioration of the transfer income gap. Thus, simply increasing the size of the fiscal expenditure may not be able to narrow the income gap, and optimizing the structure of the fiscal expenditure is the optimal policy.
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