Working Paper: NBER ID: w21555
Authors: Chadwick C. Curtis; Steven Lugauer; Nelson C. Mark
Abstract: We present a model of household life-cycle saving decisions in order to quantify the impact of demographic changes on aggregate household saving rates in Japan, China, and India. The observed age distributions help explain the contrasting saving patterns over time across the three countries. In the model simulations, the growing number of retirees suppresses Japanese saving rates, while decreasing family size increases saving for both China and India. Projecting forward, the model predicts lower household saving rates in Japan and China.
Keywords: household saving; demographics; Japan; China; India
JEL Codes: E21; J1
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| growing number of retirees in Japan (J26) | suppressing saving rates (E21) |
| decreasing family size in China and India (J13) | increasing saving rates (D14) |
| demographic aging in Japan (J11) | further depress saving rates (E21) |
| demographic aging in China (J11) | decrease saving rates (E21) |
| younger demographic profile in India (J13) | maintain higher saving rates (D14) |