Research On The Operating Characteristics Of China's Housing Provident Fund System And Its Impact On Residents' Housing Choices

Since the reform of the housing system in the 1990 s,China housing prices continued to rise,while urban residents' basic housing needs have been continuously optimizing.With the continuous intensified housing commodity and privatization,incremental of housing prices is even higher than income growth,and the house affordability difference between diversified income groups is also significant.There is a growing contradiction between housing prices and demand.Meanwhile,there are a few financial channels for Chinese residents,and strict restrictions on commercial housing mortgage loans,which cannot meet the growing demand.During this period,only a policy-oriented housing financial system can supplement and support China housing financial market,especially purchase demand from China's low-and middle-income residents.The housing provident fund system(piloted in Shanghai in 1991 and gradually rolling out throughout the country),is an important part of China's policy housing financial system.China's housing provident fund system was born at the beginning of housing system reforming period,when the housing market transformed from a welfare distribution system to a commoditized and monetized housing market.In the early days,the role of housing provident fund system was mainly on the housing supply side,used as loans for housing construction project,alleviated housing supply shortages,and financial pressure.In the later stage,when the housing distribution system transformed from physical to monetary distribution,the housing provident fund provided direct financial support for workers and families to purchase house.It showed that the establishment of housing provident fund has played a critical role in China house construction,building up residents' long-term housing savings habits,and protecting housing consumption.However,with China housing reform completion,China economy development,and the continuous increase of housing price,China's housing market is facing new challenges.At present,China's housing provident fund system has developed for nearly 30 years,and achieved a considerable scale.The housing provident fund is not only the mainstay of China's policy housing financial system,but also an important choice for residents when buying a house.Therefore,it is important to explore the housing provident fund system's protection effect for urban residents.As for theoretical value,the housing provident fund,worked as a policy-oriented housing financial system,has not been extensively studied about the impact on residents' housing behavior.In new era,studying the impact on the changes of urban residents' housing choices,helped enrich and develop the micro-mechanism of policy housing financial system.In a practical way,housing provident funds development has significant social importance at national,individual employee,and industry development level.Researching on housing provident funds is also important for residents' housing choices,formulating policies,and guiding residents' housing behavior.Based on the general principles of housing provident funds,this paper uses a combination of theory and practice,qualitative and quantitative methods,horizontal and vertical methods to quantitatively analyze the operating characteristics of housing provident funds,and its impact on residents' housing choices.On the basis of definition,characteristics and economic function of the housing provident fund,this paper uses the Ministry of Housing and Construction public data and(China Household Finance Survey)CHFS data,analyze four dimensions including of behavior choice of suites and renting are studied.From the effectiveness of housing provident fund operation,housing provident choice for residents' housing location,multi-suite behavior choice,renting choice?At the very beginning,this paper briefly explains the background and function of the establishment of China's housing provident fund system,and explains the reasons for writing the paper.Then it demonstrates the necessity of the research from theoretical and practical significance,expounds research methodology,basic structure,main innovations and thesis deficiencies.Secondly,this article analyzes the management model and operating mechanisms of housing provident fund,including coverage,revenue & expenditure,operating status,fund deposits,withdrawals and loans,etc.Based on evaluation and empirical analysis of overall operating mechanisms,this paper focuses on the effect of the housing provident fund on residents' housing choices,especially when residents buy houses.This article further discusses the effect of the housing provident fund system on households' multi-suite behavior and renting behavior.In addition to the above research results,this article also proposed three innovative points:First of all,this paper analyses the impact of housing provident fund on residential location choices.The important content of urban economics theoretical research is the influence of family to maximize housing choices with limited resources,and different income consumers' housing choices are diversified.However,the current research on housing provident fund for residents' housing choices focusing on residential housing purchase and tenure options,the effect on residential housing consumption has been verified.No literature,to my knowledge,ever explored the effect of policy housing financial system,especially the housing provident fund system,on the choices of residential location choices.Housing provident fund,as an important supplement to the housing financial system,will inevitably affect the residential location when making house purchasing choice.For the first time,this chapter empirically tests the role of participating in the housing provident fund system in the choice of residential location choices for urban residents,and attempts to use the propensity score matching method to solve the endogenous problem of the housing provident fund system.This chapter uses a simultaneous equation model to establish an endogenous model of distance and area.The results of the study finds that for families with a given income constraint,participation in the housing provident fund system will prompt them to choose a house closer to the city center,but families will choose homes that are closer to the city centre but have a smaller living area.An analysis of the heterogeneity of the housing provident fund system for the choice of urban residents' location choices finds that the housing provident fund system's effect on the choice of location choices was more significant for low-income families.And this paper further finds that participating in the housing provident fund system has a more significant impact on the housing location of low-income families,ordinary employees and young and middle-aged people when they buy a house.Secondly,based on the mixed cross-section data of CHFS from year 2011 to year 2017,this chapter analyzed the effect of the housing provident fund system on the tenure choices of urban residents.The results in this article show that participating in the housing provident fund system will significantly promote the tenure choice of urban residents.An analysis of the heterogeneity of the empirical model shows that the participation of the housing provident fund system has a more significant impact on the tenure choice of the low-and-middle-income residents,ordinary employees,elderly-owner households.The extended research in this chapter finds that,for the first time,the intermediary effects and regulatory effects that participating in the housing provident fund system will affect urban residents' tenure choices through the intermediary variable's lasting income,while education and housing price levels will regulate the effect of the provident fund system on urban residents' tenure choices.Thirdly,this article discussed the impact of housing provident fund on residents' renting behavior.The study found that although deposit limits of housing provident fund do not affect residents' renting behavior,they do have a positive impact on residents' rental consumption.The impact mechanism of participating in the housing provident fund system on the consumption of urban residents' rented houses was discussed for the first time through the cross-section data of CHFS2017.Empirical research results have found that participating in the housing provident fund system will promote residents to choose a higher rent when renting a house.Participation in the housing provident fund system can improve the renting situation of residents.This chapter attempts to eliminate the bias of self-selection by using propensity score matching method,which further validates the research hypothesis of this chapter.This chapter analyzes the heterogeneity of housing provident fund for urban residents' rental consumption.The results of the heterogeneity analysis find that the participation of the housing provident fund system has a more significant impact on the rental consumption of high-income,ordinary employees,elderly families and local residents.This chapter also discusses the effect of the housing provident fund on the rent-to-income ratio of residents.The study finds that participating in the housing provident fund system will significantly reduce the rent-to-income ratio of residents and improve the housing affordability of residents.Last but not least,as income level continues to increase,residents' willingness to purchase multiple houses continues to increase.As a policy-financial system,the housing provident fund prevents residents' willingness to buy multiple homes at policy level.However,this study finds that housing provident fund will encourage residents' purchase of improved multi-suites,while the effect on investment multi-suites is not significant.Through heterogeneity analysis,this paper finds that the contribution of provident funds to multi-housing decisions is mainly reflected in low-income,employees,middle-aged and young families.This reflects the policy tilt and support of housing provident funds to families with weaker home purchasing capabilities.Through the analysis of the difference between different housings,this find that the housing provident fund's support for multi-suite families is mostly to support their improvement needs rather than investment needs,which also reflects the housing provident fund's policy to improve the housing conditions of residents.Since the implementation of the housing provident fund nationwide was after the reform of the national housing system in 1999,and many families used the low-priced units to buy public housing as their first home acquisition method,we therefore distinguished homes between the before-reform housing and the non-reform housing.As a result,it was found that,for the first non-renovated family,the housing provident fund has a significant positive impact on their multi-suite decision,while for the first family who lives in a converted house;the housing provident fund has no significant effect on their multi-set decision.In the end,we found that a housing provident fund account can significantly increase the willingness of homeowners to purchase multiple homes.Based on the findings of the above research,this article recommended the corresponding policies on how to provide housing provident fund with active protection and guidance for residents' housing,and also as a policy housing financial system,how to protect urban residents from "live for a living".Firstly,we should expand coverage of the Fund,release withdrawal conditions,and rationally use the value-added income of housing provident fund.Second,we should give full space to the intended purpose of policy housing financial system,focusing on service targets of low-and middle-income groups,implementing differentiated deposit and “high deposit with low loan” interest rate policies.Finally,gradually establish a sound policy housing financial institution system,gradually promote the transformation of existing housing provident fund management institutions,and establish a housing provident funds centered policy housing bank.