A Quantitative Evaluation of the Housing Provident Fund Program in China

Xiaoqing Zhou

No 2008, Working Papers from Federal Reserve Bank of Dallas

Abstract: The Housing Provident Fund (HPF) is the largest public housing program in China. It was created in 1999 to enhance homeownership. This program involves a mandatory saving scheme based on labor income. Past deposits are refunded when the worker purchases a house or retires. Moreover, the program provides mortgages at subsidized rates to facilitate these home purchases. I calibrate a heterogeneous-agent life-cycle model to quantify the effects of these policies. My analysis shows that a housing program with these features is expected to raise the rate of homeownership by 8.7 percentage points and to increase the average home size by 20%. I discuss the economic mechanisms by which these outcomes are achieved and which features of the HPF program are most effective. I also consider several extensions of the model such as requiring employers to contribute to the program and allowing renters to withdraw funds from the HPF.

Keywords: Public policy; Housing Provident Fund; Policy evaluation; China; lifecycle models; Homeownership (search for similar items in EconPapers)
JEL-codes: E2 E6 H3 R2 R3 (search for similar items in EconPapers)
Pages: 43
Date: 2020-03-19
New Economics Papers: this item is included in nep-cna, nep-dge, nep-mac, nep-tra and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Journal Article: A quantitative evaluation of the Housing Provident Fund program in China (2020)
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DOI: 10.24149/wp2008

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