The Impact of Income Gap between Urban and Rural on Chinese Economic Growth: Based on the Perspective of Fiscal Expenditure Structure

摘要

Against the backdrop that the urban-rural gap is widening, this paper conducts a descriptive analysis of the urban-rural gap in China from 1978 to 2016. Combining the fiscal expenditure structure, this paper measures the income gap, per capita GDP, fiscal per capita expenditure of general public services, science, technology, culture and health, social security, employment and national defense expenditure in the east China, central China and west China, respectively. The fixed effect model and the OLS model is used to verify the relationship among the urban-rural income gap, fiscal expenditure structure and China's economic growth in China, east China, central China and west China, respectively. Research results suggest that the urban-rural income gap has a significantly negative impact on China's economic growth. Elimination of the negative impact of the urban-rural income gap on China's economic growth relies on the role of the fiscal expenditure structure in adjusting the urban-rural income gap. Meanwhile, it is necessary to properly shrink the percentage of general public services and national defense in the fiscal expenditure structure, and improve the percentage of expenditure of science, technology, culture and health as well as percentage of input in rural areas.