Fiscal Decentralization,Government Competition,and Labor Income Share:Evidence from the"Province Managing Counties"Reform
In the context of further advancing fiscal system reform below the provincial level and promoting common prosperity,improving resident income and labor compensation through better fiscal mechanisms has become an important topic.This paper examines the impact of the"prov-ince managing counties"(PMC)reform,a form of fiscal decentralization,using data from China's industrial enterprises and county-level statistics.By employing a staggered difference-in-differences(DID)model,this paper investigates how this reform affects the share of labor in-come within enterprises.The empirical results show that the PMC fiscal system reform signifi-cantly reduces the share of labor income within local enterprises.Further analysis reveals that the PMC reform increase local government decentralization,leading to distorted tax enforcement and fiscal expenditure competition among local governments.This,in turn,increases tax avoidance by enterprises and worsen financing constraints,resulting in a negative impact on the share of la-bor income within enterprises.
fiscal system reformprovince managing countiesgovernment competitionlabor in-come share
NETL
NSTL
万方数据
