Population aging, intergenerational transfers, and saving in Japan

Naohiro Ogawa, Nihon University
Amonthep Chawla, Thailand Development Research Institute
Rikiya Matsukura, Nihon University

There has been no consensus with regard to the magnitude of the impact of age structural transformations upon saving rates. Several empirical studies have found that saving rates are substantially affected as population age structures shift. Some other studies have concluded that changes in age structures generate only a minor effect on aggregate saving rates. By applying Japanese micro-level data to the framework of the National Transfer Accounts, we analyze the nexus between population aging and saving rates. The data are from the five rounds (1984- 2004) of the National Survey of Family Income and Expenditure. It should be noted that during this period, Japan’s population aged very rapidly and its household saving rate declined to a considerable degree. Moreover, by utilizing NTA as a base for analysis, we will be able to shed light on how and to what extent changes in intergenerational transfers, coupled with population aging, influence saving behavior.