Abstract: Optimizing social security expenditures by governments at all levels is an important task in promoting the equalization of basic public services, and the reasonable allocation of expenditure responsibilities must be based on the government financial resources. Based on the data of 25 provinces and 243 prefecture-level cities, this paper adopts the relational data analysis paradigm to conduct an empirical study of the impact of the horizontal differences in local financial resources on the equalization of social security expenditures. The findings show that, firstly, the horizontal difference of financial resources has an inhibitory effect on the equalization of social security expenditure at both provincial and prefecture-level cities, and it is stronger at the prefecture-level city level. Secondly, at the provincial level, this effect is manifested at the provincial level as an increasing trend in the central, western, and eastern regions; on the contrary, at the level of prefecture level cities, it shows an increasing trend in the eastern, western, and central regions. Thirdly, whether at the provincial level or prefecture level, the structure of government fiscal expenditure and the central government supervision of social security are important intermediary factors that affect the equalization of social security expenditures due to horizontal differences in financial resources. Based on this, to promote the equalization of social security expenditure in China, the state needs to strengthen the horizontal adjustment of local financial resources and optimize the "hierarchical" design of the equalization top-level system, as well as improve the central transfer payment mechanism.

Key words: social security expenditure, equalization, local government finance, fiscal decentralization