17 Pages Posted: 11 Nov 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.
Suggested Citation: 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
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