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College tuition payment and household consumption in Japan

Author

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  • Satoshi Shimizutani

    (Institute for International Policy Studies)

Abstract

Because tuition payment comprises a large proportion of expenses in households with children in universities, it causes large and clearly predictable changes in discretionary income in predetermined months. This study examines consumption smoothing for those households as an alternative test of the life-cycle/permanent income hypothesis, using the Japanese Family Income and Expenditure Survey. We show that a one yen decrease in discretionary income due to tuition payment is associated with 0.1–0.2 yen decrease in non-tuition spending in the month of tuition payment, showing that those households are not engaged in consumption smoothing.

Suggested Citation

  • Satoshi Shimizutani, 2017. "College tuition payment and household consumption in Japan," Review of Economics of the Household, Springer, vol. 15(1), pages 265-285, March.
    • Handle: RePEc:kap:reveho:v:15:y:2017:i:1:d:10.1007_s11150-014-9257-6
    DOI: 10.1007/s11150-014-9257-6
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    More about this item

    Keywords

    Consumption smoothing; Life-cycle/permanent income hypothesis; Tuition payment; Family Income and Expenditure Survey;
    All these keywords.

    JEL classification:

    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth

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