The unintended impact of housing provident fund on income inequality in urban China
We use the China Household Income Project (CHIP) data to evaluate the impact of the Housing Provident Fund (HPF) on income inequality in urban China. We find that urban residents differ significantly in their accessibility to and intensity of utilization of the HPF. Those who work in the public sect...
| Main Authors: | , |
|---|---|
| Format: | Article |
| Language: | English |
| Published: |
KeAi Communications Co. Ltd.
2021-12-01
|
| Series: | China Economic Quarterly International |
| Subjects: | |
| Online Access: | http://www.sciencedirect.com/science/article/pii/S2666933121000496 |
| _version_ | 1828086157983875072 |
|---|---|
| author | Yunhe Lu Haiyuan Wan |
| author_facet | Yunhe Lu Haiyuan Wan |
| author_sort | Yunhe Lu |
| collection | DOAJ |
| description | We use the China Household Income Project (CHIP) data to evaluate the impact of the Housing Provident Fund (HPF) on income inequality in urban China. We find that urban residents differ significantly in their accessibility to and intensity of utilization of the HPF. Those who work in the public sector, in monopolistic industries, and possess managerial or professional occupations are more likely to benefit from the HPF, leading to further income inequality. Our research also emphasizes four mechanisms through which the HPF affects income inequality. The foregone interest due to compulsory HPF saving is the only mechanism that decreases the inequality, whereas the employer's match, personal income tax exemption on the HPF, and lower interest expense due to acquiring the HPF loan increase inequality. The evidence highlights the HPF's unintended redistributive impacts and thus the necessity of enhancing equity in the ongoing HPF reform. |
| first_indexed | 2024-04-11T04:51:27Z |
| format | Article |
| id | doaj.art-c4e7d2865f4d4191a8e6d58aa80696b3 |
| institution | Directory Open Access Journal |
| issn | 2666-9331 |
| language | English |
| last_indexed | 2024-04-11T04:51:27Z |
| publishDate | 2021-12-01 |
| publisher | KeAi Communications Co. Ltd. |
| record_format | Article |
| series | China Economic Quarterly International |
| spelling | doaj.art-c4e7d2865f4d4191a8e6d58aa80696b32022-12-27T04:38:46ZengKeAi Communications Co. Ltd.China Economic Quarterly International2666-93312021-12-0114308318The unintended impact of housing provident fund on income inequality in urban ChinaYunhe Lu0Haiyuan Wan1School of Public Finance and Taxation, Shandong University of Finance and Economics, China; China Institute for Income Distribution, Beijing Normal University, ChinaChina Institute for Income Distribution, Beijing Normal University, China; Business School, Beijing Normal University, China; Corresponding author. Business School, China Institute for Income Distribution, Beijing Normal University, Room 403, No. 19 Xinjiekou Wai Street, Haidian District, Beijing, 100875, China.We use the China Household Income Project (CHIP) data to evaluate the impact of the Housing Provident Fund (HPF) on income inequality in urban China. We find that urban residents differ significantly in their accessibility to and intensity of utilization of the HPF. Those who work in the public sector, in monopolistic industries, and possess managerial or professional occupations are more likely to benefit from the HPF, leading to further income inequality. Our research also emphasizes four mechanisms through which the HPF affects income inequality. The foregone interest due to compulsory HPF saving is the only mechanism that decreases the inequality, whereas the employer's match, personal income tax exemption on the HPF, and lower interest expense due to acquiring the HPF loan increase inequality. The evidence highlights the HPF's unintended redistributive impacts and thus the necessity of enhancing equity in the ongoing HPF reform.http://www.sciencedirect.com/science/article/pii/S2666933121000496Housing provident fundIncome inequalityMechanism |
| spellingShingle | Yunhe Lu Haiyuan Wan The unintended impact of housing provident fund on income inequality in urban China China Economic Quarterly International Housing provident fund Income inequality Mechanism |
| title | The unintended impact of housing provident fund on income inequality in urban China |
| title_full | The unintended impact of housing provident fund on income inequality in urban China |
| title_fullStr | The unintended impact of housing provident fund on income inequality in urban China |
| title_full_unstemmed | The unintended impact of housing provident fund on income inequality in urban China |
| title_short | The unintended impact of housing provident fund on income inequality in urban China |
| title_sort | unintended impact of housing provident fund on income inequality in urban china |
| topic | Housing provident fund Income inequality Mechanism |
| url | http://www.sciencedirect.com/science/article/pii/S2666933121000496 |
| work_keys_str_mv | AT yunhelu theunintendedimpactofhousingprovidentfundonincomeinequalityinurbanchina AT haiyuanwan theunintendedimpactofhousingprovidentfundonincomeinequalityinurbanchina AT yunhelu unintendedimpactofhousingprovidentfundonincomeinequalityinurbanchina AT haiyuanwan unintendedimpactofhousingprovidentfundonincomeinequalityinurbanchina |