Household Saving in Japan: The Past, Present, and Future

No 33181, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper explores the determinants of the level of, and trends over time in, Japan’s household saving rate, with emphasis on the impact of the age structure of the population, and makes projections about future trends therein. The paper finds that Japan’s household saving rate has not always been high either absolutely or relative to other countries and that it was only during the 1961-86 period that it exceeded 15%. Past and future trends in Japan’s household saving rate can largely be explained by changes in the age structure of her population, but declines in the saving rate of retired elderly households is a more important explanation for the recent decline in the household saving rate. However, it is likely that other factors such as the unavailability of consumer credit, the unavailability of social safety nets, high rates of economic (income) growth, tax breaks for saving, saving promotion policies, and high and rising land and housing prices are also partial explanations for why Japan’s household saving rate was so high during the 1961-86 period and why it declined so much subsequently. Finally, we project that Japan’s household saving rate will fall even further though not necessarily at a rapid rate.

JEL-codes: D10 D11 D12 D14 D15 D64 E21 H55 J14 J26 (search for similar items in EconPapers)
Date: 2024-11
Note: AG EFG PE
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Related works:
Working Paper: Household Saving in Japan: The Past, Present, and Future (2024)
Working Paper: Household Saving in Japan: The Past, Present, and Future (2024)
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