The Decline of Japan's Saving Rate and Demographic Effects*

Abstract

This paper investigates the phenomenon in which Japan's household saving rate showed a sharp decline even during the long stagnation period called "the lost decade." Our empirical results show that the sharp decline in the saving rate in the 1990s can be explained by the significant impact of demographic factors. Furthermore, the estimated life cycle curve is hump shaped, meaning that the prediction of the life cycle model is confirmed with time series data on the Japanese saving rate. JEL Classifications: E21, E27.

Macroeconomic Impact of Population Aging in Japan: A Perspective from an Overlapping Generations Model

“…Speci…cally, a decline in the fertility rate, an increase in longevity, or a combination of both can act to foster investment in foreign capital by lowering the return on domestic capital. 21 In Figure 13, we chart the evolution of the current account 2 0 Admittedly, the assumed rate of return on foreign capital is critical in determining the extent both of capital out ‡ows and income in ‡ows. For example, in an alternative case where the rate of return on foreign capital declines gradually, as it would if population aging were also taking place abroad, foreign capital also becomes less attractive than before.…”

The fading 1990s in Japan: Driving forces behind the unemployment upsurge

“…We believe the specificities of the Japanese labor market require such a wider perspective as well as the inclusion of macroeconomic variables the existing literature has already found relevant. For example, the decline in productivity (Hayashi andPrescott, 2002, andFukao, 2006), the explosion in the government debt (Barseghyan, 2006a), the rising long-term debt of firms in terms of their assets (Ogawa, 2003), or the demographic behavior and the aging population problem (Koga, 2006). These and other more specific labor market variables are considered in the estimation of a three-equation dynamic system comprising employment, labor supply, and the rate of unemployment as endogenous variables.…”

Ahorro de los hogares, demografía y mercado laboral en Colombia, 1950-2012

“…Por ejemplo, en Japón, después de tener la tasa de ahorro más alta entre los países desarrollados en la década de 1980 y principios de los noventa, ha caído rápidamente desde entonces, asociada en parte con el mayor proceso de envejecimiento de su población y con la reforma del sistema de seguridad social que contribuyó a disipar las preocupaciones por el futuro, gracias a la disminución de los riesgos financieros que pudieron aminorar los incentivos a ahorrar para la jubilación y por el motivo precaución (Katayama, 2006). Por su parte, Koga (2005) muestra que los cambios demográficos fueron la mayor causa de la declinación de la tasa de ahorro en Japón desde los noventa. Además, la estimación de los efectos de la estructura etárea de la población sobre la tasa de ahorro agregado sigue un patrón en forma de joroba.…”