Housing provident fund,mandatory savings effect and Chinese household consumption
Insufficient aggregate demand is the prominent contradiction facing the current eco-nomic operation,we must restore and expand consumption in a priority position.This paper empirically investigates the impact of the housing provident fund system on household consump-tion using data from three editions of the China Household Finance Survey in 2015,2017,and 2019.The empirical results show that household contributions and withdrawals to the hous-ing provident fund significantly increase household consumption levels and improve household consumption structure.Robustness tests show that the above conclusions remain robust after replacing the way the core variables are defined,replacing the instrumental variables,and relax-ing the exclusivity constraints on the instrumental variables.The Heterogeneity analysis shows that the housing provident fund system has a greater impact on the consumption of housed,low-income,as well as young and middle-aged households.Further research finds that contribut-ing to the housing fund reduces households'precautionary saving incentives,withdrawing from the housing fund increases households'disposable income and eases liquidity constraints,thereby boosting household consumption.This paper provides micro-level evidence that housing funds promote household consumption and improve household consumption structure,which can pro-vide important references for relevant policy formulation.
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