Housing Needs And Housing Subsidy Standard For Civil Servants In China

Housing subsidy, provided by government, is one of the important benefits forcivil servants in China. Since the Housing Privatization Reform was implemented in1998, the current housing subsidy could not satisfy civil servants' housing demand,which has became one of the most tough issues in the housing policy system forcivil servants. So it is important to analyze the defects of current housing subsidystandards for civil servants and design a more suitable subsidy distribution rules,which will improve the quality of civil servants' housing policy system and lead tobetter living condition.In China, the current standard of the housing subsidy distribution is mainlybased on the position ranks of civil servants. This dissertation will not only focus onthe rank system, but also consider their housing needs as an important criterion. Theempirical data was collected from the survey of civil servants in nationalgovernment department.According to the investigation of a rank system of civil servants, a promotionwill be taken averagely every 5 to 6 years, consequently, the age of civil servantsand their rank status are greatly correlated. So, a rank-age model is built based onthis assumption. In the model, all civil servants are categorized into 29 groupsaccording to the combination of their ages and rank status. The civil servants in thesame group have similar housing needs, and they will enjoy the same standard ofhousing subsidy.The research on housing needs of civil servants indicates that householdlifecycle does influence directly on housing need, which is presented by the housingsize. Along with aging of civil servants, the size will tend to follow a pattern like"increasing -stabilizing – decreasing". This dissertation estimate the basic housingsize required for each age group of civil servants.Based on above theoretical, empirical study is made to investigate the matchbetween housing subsidy and civil servants' basic housing needs. The results are asfollows: the current housing subsidy standard results in a low resource allocationefficiency of housing subsidy, and also leads to a lack of fairness. As the same time,the basic housing requirement of most civil servants can not be well met. Undercurrent standard system, it is quite difficult to distribute the housing subsidy fundamong the groups of civil servants in terms of rank status and household stages.Consequently, a considerable portion of fund has been transferred to non-housingconsumption or other people groups rather than civil servants. Obviously, utilitymaximization can not be achieved in such a situation.In the final part of this dissertation, some policy implications are addressed. Inshort run, policy makers can reduce the gaps of housing subsidy among differentrank status, and it also will be helpful for young civil servants to use their housingsubsidy in advance. In long run, more housing subsidy framework should bedeveloped introducing various financial instruments and using supply-side subsidy.In conclusion, due to the limitations of current housing subsidy standards, it isessential to adopt a new and sustainable system of housing subsidy standards inorder to improve the housing guarantee system for civil servants.