Analysis of the impact of local fiscal expenditures in each of Korea's 16 cities and provinces on regional output and consumption due to changes in population structure

This study is based on the continuous increase in local fiscal expenditure, and from 2001 to 2019, 16 Korea's annual social development expenses and economic development expenses panel data are used to analyze the impact of fiscal expenditure and aging on the regional output (GRDP) and consumption. In particular, differential analysis was performed by applying the interaction with the elderly population ratio. In order to assess the effects of local fiscal expenditures on calculation and consumption, the convergence model of Barro and Sala-I-Martin (1991) was applied to confirm the strong robustness of the results. As a result of the analysis, the spending of social development expenses had a negative impact on the regional output and consumption growth, but economic development expenses had a positive effect. On the other hand, spending on social development for the elderly population has been confirmed to have a positive impact on regional output and consumption. These results are consistent in the convergence model and provide an important implications for the future financial expenditure policy direction of our economy.