Wealth Accumulation of the Elderly in Extended Families in Japan and Distribution of Wealth within Japanese Cohorts by Household Composition: A Critical Analysis of the Literature

Levy Economics Institute Working Paper No. 63

17 Pages Posted: 5 Aug 1999

Date Written: September 1991

Abstract

This paper is a critique of the literature on transfer wealth accumulation in Japan during the postwar period. The emphasis is on selected works in two areas that are closely related: the accumulation of wealth by the elderly in extended families in Japan, and the distribution of wealth within Japanese cohorts by household composition.

The central point of contention is what relationship, if any, exists between the age of the elderly in extended families and the accumulation or decumulating of wealth Ando concludes that increasing age positively correlates with decumulating wealth. In contrast, a subsequent paper by Hayashi, Ando, and Ferris asserts that the elderly in families are actually accumulating wealth. However, neither conclusion is supported by existing empirical data since the authors fail to account for the joint effect of wealth between young people and the elderly in extended families-the wealth of the young may interact with the wealth of the elderly.

The current literature, in addition to relying on invalid conclusions of a relationship between the elderly in extended families and wealth, is plagued by insufficient empirical evidence (e.g. failure to demonstrate a link between wealth and present income, making broad assumptions about transfer of wealth from parents to children, etc.). In sum, the existing research has not yet demonstrated that the elderly in extended families in recent years have been accumulating or decumulating assets, also there is no evidence (contrary to popular belief) of a relationship between household composition and the wealth.

JEL Classification: E21

Suggested Citation

Campbell, David W., Wealth Accumulation of the Elderly in Extended Families in Japan and Distribution of Wealth within Japanese Cohorts by Household Composition: A Critical Analysis of the Literature (September 1991). Levy Economics Institute Working Paper No. 63. Available at SSRN: https://ssrn.com/abstract=169416 or http://dx.doi.org/10.2139/ssrn.169416

David W. Campbell (Contact Author)

University of Essex

Wivenhoe Park
Colchester, CO4 3SQ
United Kingdom
+44 1206 872641 (Phone)

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