Whether Transfer Payments Optimize the Fiscal Expenditures on Social Security: From the Perspective of Equalization and Growth——Based on the County Data of 25 Provinces in China

As an important public service of local government, the fiscal spending on social security and their equalization between areas are being taken more seriously. After the Tax-Sharing System Reform, the fiscal expenditure of local governments relies more and more on the transfers of superior governments. By constructing a comprehensive analysis framework, we can measure the "growth effect" and "equalization effect" of transfers on fiscal spending of social security. Applying this analysis framework and the county-level data of 25 provinces in 2007, we can draw the conclusion that, the comprehensive effect of transfers on social security spending showed "equalization and inducing effect" in 18 provinces and "equalization and crowding-out effect" in other 7 provinces. The optimization degrees of transfers on county social security spending differ in different provinces, so we need individualized policy suggestions which base on the evaluation framework and positive analysis to different provinces.