This paper analyzes the substitution and trade-off effects of homeownership and housing price on social security expenditure. We construct a theoretical model to investigate the optimal choice for individual and government in social security system with estate transaction. The model predicts that the government is more likely to decrease (increase) social security spending under a higher home rate when house price rises (falls). We test 35 metropolises panel data which spans the year of 1998–2012 under a two-way fixed effects framework. Our empirical analysis supports the theoretical prediction. The estimation results show that at the current home rate 82%, 1% increase in housing price will lead to 1.15 Yuan reduction in social security spending per capita.

中文翻译：

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房屋所有权，住房价格和社会保障支出

本文分析了房屋所有权和住房价格对社会保障支出的替代和权衡作用。我们构建了一个理论模型来研究具有房地产交易的社会保障体系中个人和政府的最优选择。该模型预测，在房价上涨（下跌）时，在较高的房价下，政府更有可能减少（增加）社会保障支出。在双向固定效应框架下，我们测试了1998年至2012年的35个大都市面板数据。我们的经验分析支持理论预测。估算结果表明，以目前的82％的住房税率，房价上涨1％将导致人均社会保障支出减少1.15元。