Does Vertical Fiscal Imbalance Affect the Transfer of Rural Surplus Labor?

This paper explores the theoretical mechanisms through which vertical fiscal imbalance influences the transfer of rural surplus labor. Using provincial-level panel data from 1998 to 2017, it empirically examines the effects of vertical fiscal imbalance on this labor transfer process. The findings indicate that: (1) Currently, vertical fiscal imbalance has a significant direct hindering effect on the transfer of rural surplus labor. (2) Vertical fiscal imbalance hinders the transfer of the rural labor force by slowing down regional economic growth and limiting the effectiveness of regional human capital investment. The indirect effect of the former is weaker than the indirect effect of the latter.

References

Cai F, 2018, Has the Potential of Agricultural Labor Transfer Been Exhausted? Chinese Rural Economy, (9): 2–13.

Xie LH, Lyu KY, 2020, Five Major Issues of Rural Labor Transfer Employment during the 14th Five Year Plan Period. Economist, (10): 56–64.

Chu DY, Shao J, Chi SX, 2019, Does Fiscal System Imbalance Suppress Local Governments' Tax Efforts? Economic Research Journal, 54(10): 41–56.

Liu SX, Yang SP, 2021, Does Vertical Fiscal Imbalance Affect Local Fiscal Expenditure Efficiency? Contemporary Finance & Economics, 32(7): 24–37.

Lin C, Sun YJ, 2019, Vertical Fiscal Imbalance, Local Government Behavior and Economic Fluctuations. Economist, (9): 44–53.

Zhao N, Li GQ, Li XJ, 2020, Vertical Fiscal Imbalance, Local Government Tax Efforts and Capital Misallocation. Journal of Hunan University (Social Sciences), 34(6): 83–91.

Chu DY, Shao J, 2018, Vertical Fiscal Imbalance, Public Expenditure Structure and Economic Growth. Economic Theory and Business Management, (10): 30–43.

Ye L, Wu ML, Gao YL, 2016, Land Finance and Urban Expansion: Empirical Evidence and Countermeasures. Comparison of Economic and Social Systems, (2): 39–47.

Chao XJ, Shen KR, 2014, Urban-Rural Income Gap, Labor Quality and China's Economic Growth. Economic Research Journal, 49(6): 30–43.

Liu ZZ, He CY, Wang YZ, 2007, An Empirical Analysis of the Impact of Private Sector Export Trade on the Transfer of Agricultural Surplus Labor Based on the Ranis Fei Model. Chinese Rural Economy, (10): 40–45.

Zhao DZ, Xu HL, 2014, Reform of Sub Provincial Fiscal Decentralization System and Transfer of Rural Surplus Labor: An Empirical Study Based on Data from 282 Prefecture Level Cities in China. Collected Essays on Finance and Economics, (1): 28–35.

Eyraud L, Lusinyan L, 2013, Vertical Fiscal Imbalances and Fiscal Performance in Advanced Economies. Journal of Monetary Economics, 60(5): 571–587.

Tang FP, Ye LE, 2020, Tax Competition, Capital Voting with Feet and Industrial Transformation and Upgrading. Finance & Trade Economics, 41(11): 20–34.

Tang FP, Ye LE, 2020, Central Transfer Payments and Local "Tax Havens": Stabilization or Intensification. Contemporary Finance & Economics, (1): 37–50.

Liu XG, Zhang X, Fang WQ, 2015, The Urban-Rural Income Distribution Effect of Infrastructure: From the Perspective of Labor Transfer. The Journal of World Economy, 38(3): 145–170.

Feng HB, Fang YZ, 2014, An Analysis of the Environmental Effects of Local Fiscal Expenditure: An Empirical Investigation Based on Chinese Cities. Finance & Trade Economics, (2): 30–43 + 74.

Previous article in this issue

Next article in this issue