Inequity in Housing Welfare: Assessing the Inter-City Performance of China’s Housing Provident Fund Program

Abstract

Accompanied by the monetisation of housing allocation, the Housing Provident Fund (HPF) has become an important part of China’s housing security system. As of 2020, HPF has been implemented for almost 30 years, but limited effort has been made to examine its performance, especially from a spatial (regional) perspective. Taking 287 Chinese cities as a sample and using the “access–process–outcome” framework, this study explores the inter-city differences in the performance of HPF and their relevant influencing factors. The results show that (1) there is significant spatial heterogeneity in the performance of HPF in China; (2) from 2015 to 2020, regional variation in the process and outcome performance showed a convergence trend, but the access performance between cities tended to widen and diverge; (3) regression results show that process-relevant variables (i.e., the contribution rate and the capital utilization level) are positively associated with the loan beneficiary rate (the HPF outcome performance), whereas access-relevant attributes (i.e., the HPF participation rate) exert negative influences. The study contributes to revealing the spatial heterogeneity of China’s HPF development. It highlights that more regionally oriented policy interventions are needed for policy makers and practitioners to optimize the development of HPF.

Economic Potential Gain, Income Uncertainty, and Rural Migrants’ Urban Homeownership: Evidence from China

“…There are two approaches for Chinese urban households to access mortgage finance for housing purchase: commercial bank mortgage loan and the Housing Provident Fund (HPF), the latter of which is a type of preferential home loan issued by the fund pool collected through contributions from both employers and salaried employees [61]. HPF is a compulsory saving system that is legally enforced on employers and employees of formal sectors but optional for small private firms; thus, its participation rate varies significantly across industries and cities [61][62][63]. Individual-level HPF participation has been verified to be significantly positively related to rural migrants' urban settlement intentions [10].…”