Aging, Savings, and Public Pensions in Japan
Charles Yuji Horioka
University of the Philippines, Diliman; National Bureau of Economic Research (NBER); Osaka University - Institute of Social and Economic Research (ISER)
University of Gakugei
National Graduate Institute for Policy Studies (GRIPS)
Asian Economic Policy Review, Vol. 2, No. 2, pp. 303-319, December 2007
We analyze the impact of population aging on Japan's household savings rate and on its public pension system and the impact of that system on Japan's household savings 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 savings rate; second, the rapid aging of Japan's population is causing Japan's household savings 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 savings rates of cohorts born after 1965, which in turn slowed the decline in Japan's household savings 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 savings rate.
Number of Pages in PDF File: 17Accepted Paper Series
Date posted: November 11, 2007
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