Pension Expectations and Household Portfolio Choice of the Elderly in Japan

29 Pages Posted: 29 Oct 2022

See all articles by Tsunao Okumura

Tsunao Okumura

Yokohama National University

Emiko Usui

Hitotsubashi University - Institute of Economic Research; IZA Institute of Labor Economics

Abstract

Using the Japanese Study of Aging and Retirement (JSTAR), we examine the determinants of household portfolio choice by the elderly in Japan. Only one-fifth of Japanese elderly hold stocks among their financial assets. Japanese elderly who are more educated, have better mental functions, have higher income, and subjectively expect a greater probability of living until at least age 80 are more likely to hold stocks. Among those who plan to receive public pension benefits in the future, those who expect a greater decline in future public pension benefits have a smaller share of stocks and a larger share of bonds in their portfolio of financial assets, but both are in small quantities. The most important factors affecting the relatively low investment in stocks by Japanese elderly are educational and income differences, rather than their low expectations about their future pension benefits.

Keywords: Household portfolio choice, subjective expectations, pension benefits, Japan.

Suggested Citation

Okumura, Tsunao and Usui, Emiko, Pension Expectations and Household Portfolio Choice of the Elderly in Japan. Available at SSRN: https://ssrn.com/abstract=4261528 or http://dx.doi.org/10.2139/ssrn.4261528

Tsunao Okumura

Yokohama National University ( email )

Tokiwadai, Hodogaya-Ku, Yokohama
Yokohama
Japan

Emiko Usui (Contact Author)

Hitotsubashi University - Institute of Economic Research ( email )

2-1 Naka Kunitachi-shi
Tokyo 186-8306
Japan

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany

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