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Seoul Journal of Economics
[ Article ]
Seoul Journal of Economics - Vol. 32, No. 3, pp.285-322
ISSN: 1225-0279 (Print)
Print publication date 31 Aug 2019
Received 07 Jul 2018 Revised 05 Mar 2019 Accepted 08 Apr 2019

Dissaving by the Elderly in Japan: Empirical Evidence from Survey Data

Keiko Murata
Keiko Murata, Graduate School of Management, Tokyo Metropolitan University, 1-1 Minami-Osawa, Hachioji-city, Tokyo 192-0397, Japan, Tel: +81-426-77-1111 keiko-murata@tmu.ac.jp

JEL Classification: D14, E21, D64, J14

Abstract

This study empirically examines the (dis)saving behavior of the elderly in Japan using two micro-datasets of household surveys. The long-run dataset, which covers 20 years, indicates that on average, the elderly in Japan dissave, but the pace of dissaving of retired elderly is excessively slow in light of the standard life cycle/permanent income hypothesis. Analysis results suggest that one likely factor is the desire to leave a bequest. The saving rate and pace of wealth decumulation show that retired households slowly dissave if the head plans to leave a bequest. Retired elderly who intend to have savings for precautionary purposes are unlikely to slowly dissave, except for those who do not plan to leave a bequest to their children.

Keywords:

Household saving, Life cycle/permanent income hypothesis, Aging, Bequest, Precautionary saving

Acknowledgments

This work forms part of our microdata-based research on household consumption in Japan at the Economic and Social Research Institute (ESRI). I am grateful to Yoko Niimi, Charles Yuji Horioka, Jim Bean, and other participants of the 1st Annual Meeting of the Society of Economics of the Household for their valuable comments and Midori Wakabayashi for her discussion at the ESRI seminar. I also would like to thank Fumihira Nishizaki, Masaki Ichikawa, Masatoshi Inouchi, Masahiro Hori, Junya Hamaaki, Koichiro Iwamoto, Daisuke Moriwaki, Takeshi Niizeki, Fumihiko Suga, Kazuhito Higa, and other ESRI colleagues for their comments and support and Ralph Paprzycki for his excellent English editing service. This study was supported by JSPS KAKENHI Grant Number 15K03398. Special thanks go to the Statistics Bureau of Japan for providing us with the microdata from the Family Income and Expenditure Survey (FIES) and the Research Institute of Economy, Trade and Industry (RIETI), Hitotsubashi University, and the University of Tokyo for the longitudinal dataset from the “Japanese Study of Aging and Retirement (JSTAR).” The views expressed in this work are those of the author and do not represent the institutions that the author belongs to.

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