Urban-rural Social Security Imbalance and Consumption Inequality: A Study Based on the Dynamic Panel Data Model

Abstract

This paper explores the influence of the urbanrural social security imbalance on the consumption inequality with the dynamic panel data model, using the Chinese provincial panel data from 2000 to 2016. According to the empirical result, the urban-rural social security imbalance has positive correlations with the urban-rural consumption inequality. Lessening the urban-rural social security imbalance contributes to reducing the consumption inequality between the city and the country. Because of the regional difference in the economic institutions and geographic conditions, the influence of the urban-rural social security imbalance on the urban-rural consumption inequality has apparent regional differences. The urban-rural income inequality and children’s dependency ratio gap have positive correlations with the urban-rural consumption inequality, while the elderly dependency ratio gap between the city and the country has negative correlations with the urbanrural consumption inequality. Keywords—urban-rural social security imbalance; the consumption inequality; China; Theil Index