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Chinese Decentralization and Income Inequality between Urban and Rural Residents——An Empirical Study Based on the Dual Dimensions of Internal and External Budget
Pages: 109-125
Year: Issue:  2
Journal: Finance & Trade Economics

Keyword:  Chinese Style DecentralizationInternal and External BudgetIncome Inequality between Urban and Rural ResidentsPanel Data Model;
Abstract: In this paper,firstly,we explain the mechanism of income and expenditure decentralization on income inequality from budgetary and extra-budgetary.Then,on the basis of re-measuring the Gini coefficient of urban and rural income and Chinese-style decentralization,this paper examines the influence of Chinese decentralization on urban and rural residents’income inequality from national and regional perspective.The results showed as follow.Firstly,whether it is from the national or regional,budgetary revenue decentralization helps reduce inequality of the income of urban and rural residents.Secondly,the enhancement of the budgetary expenditures will exacerbate income inequality of urban and rural residents from the nation,but still can reduce the urban-rural income inequality significantly in central and western regions with low level of expenditure decentralization.Thirdly,there are consistent effects of revenue and expenditure decentralization from extra-budgetary on the income inequality of urban and rural residents from country and different regions.Revenue decentralization from extra-budgetary makes the income inequality of urban and rural residents even worse while expenditure decentralization makes it better.Fourthly,the effect of transfer payments,education years and registered urban unemployment rate to urban and rural residents’income inequality is also dispiriting,but the economic development level,urbanization and opening up to the urban and rural residents’income inequality has significant regional differences.The conclusion of this paper not only has a certain reference significance for the further improvement and reconstruction of the system of China’s decentralization,but also the direction of the new round of tax system reform.
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