China’s Housing Provident Fund: Homeownership and Housing Wealth Inequality

Abstract This paper examines the effects of China’s Housing Provident Fund (HPF) on homeownership, housing quality, housing wealth, and housing wealth inequality. Using nationally representative data from the China Household Finance Survey (CHFS), we show that HPF participation significantly increases the likelihood of homeownership, enhances housing quality in terms of location, condition, and space, and raises household housing wealth. More importantly, our results indicate that the HPF contributes to reducing housing wealth inequality: higher program coverage is associated with lower city-level inequality, while participants experience less housing wealth inequality at the household level. The redistributive impact is particularly pronounced among disadvantaged groups such as low-income households, and in cities with relatively affordable housing prices where loan ceilings are less restrictive. These findings highlight the HPF’s role in promoting inclusive housing development and reducing wealth disparities in urban China. JEL: D10; D12; R21