Working Paper: NBER ID: w13273
Authors: Charles Yuji Horioka; Wataru Suzuki; Tatsuo Hatta
Abstract: We analyze the impact of population aging on Japan's household saving rate and on its public pension system and the impact of that system on Japan's household saving rate and obtain the following results: first, the age structure of Japan's population can explain the level of, and past and future trends in, its household saving rate; second, the rapid aging of Japan's population is causing Japan's household saving rate to decline and this decline can be expected to continue; third, the pay-as-you-go nature of the public pension system, combined with rapid population aging, created considerable intergenerational inequities and increased the saving rates of cohorts born after 1965, which in turn slowed the decline in Japan's household saving rate; and fourth, the 2004 public pension reform alleviated the intergenerational inequities of Japan's public pension system somewhat but will in the long run exacerbate the downward trend in Japan's household saving rate.
Keywords: Aging; Saving; Public Pensions; Japan
JEL Codes: D12; D91; E21; E24; H55; J11
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| age structure of population (J11) | household saving rate (D14) |
| elderly dependency ratio (J14) | household saving rate (D14) |
| young dependency ratio (J19) | household saving rate (D14) |
| public pension system (H55) | household saving rate (D14) |
| public pension reform (H55) | household saving rate (D14) |
| cohorts born after 1965 (J11) | household saving rate (D14) |