Promotion Incentive, Population Mobility and Public Service Expenditure

Abstract

Improving the level of public service expenditure is the basic condition to meet people’s growing yearning for a better life in a new era. This study aims to examine the influence of promotion incentive and population mobility on public service expenditure. With the panel data of 30 provinces (excluding Tibet, Hong Kong, Macao and Taiwan) in China from 2010 to 2018, a fixed effect model was employed to conduct the empirical research first, and then analyze the heterogeneity of the impact. In addition, the robustness was examined by substituting core explanatory variables and explained variables and using the spatial econometric model. Results indicated that promotion incentive and population mobility had significant negative effects on public service expenditure (medical care, education, culture, sports and media, social security and employment). By replacing the explained variables and the core explanatory variables and using the spatial economic model, the research conclusion was still stable and reliable. In different regions, promotion incentive and population mobility had different effects on different types of public service expenditure. In addition, it was revealed that the improvement of the urbanization level, economic development level, population density, residents’ education level and the proportion of tertiary industry had a significant positive impact on public service expenditure. The findings in this study can provide useful references for policy makers to allocate public service expenditure.