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Aging, Savings, and Public Pensions in Japan

17 Pages Posted: 11 Nov 2007  

Charles Yuji Horioka

Asian Growth Research Institute; National Bureau of Economic Research (NBER); Osaka University - Institute of Social and Economic Research (ISER)

Wataru Suzuki

University of Gakugei

Tatsuo Hatta

National Graduate Institute for Policy Studies (GRIPS)

Abstract

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.

Suggested Citation

Horioka, Charles Yuji and Suzuki, Wataru and Hatta, Tatsuo, Aging, Savings, and Public Pensions in Japan. Asian Economic Policy Review, Vol. 2, No. 2, pp. 303-319, December 2007. Available at SSRN: https://ssrn.com/abstract=1026447 or http://dx.doi.org/10.1111/j.1748-3131.2007.00080.x

Charles Yuji Horioka (Contact Author)

Asian Growth Research Institute ( email )

11-4, Ohtemachi, Kokurakita-ku
Kitakyushu, Fukuoka 803-0814
Japan

HOME PAGE: http://www.agi.or.jp

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Osaka University - Institute of Social and Economic Research (ISER) ( email )

6-1 Mihogaoka
Ibaraki, Osaka 567-0047
Japan

Wataru Suzuki

University of Gakugei ( email )

Tokyo
Japan

Tatsuo Hatta

National Graduate Institute for Policy Studies (GRIPS) ( email )

7-22-1 Roppongi, Minato-Ku
Tokyo 106-8677, Tokyo 106-8677
Japan

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