IDEAS home Printed from https://ideas.repec.org/p/nbr/nberwo/3292.html
   My bibliography  Save this paper

Determinants of Saving and Labor Force Participation of the Elderly in Japan

Author

Listed:
  • Tetsuji Yamada
  • Tadashi Yamada
  • Guorn Liu

Abstract

Japanese annual time series data covering the period 1951 to 1982 reveals that changes in the program of social security retirement benefits have substantial influence on personal saving and retirement behavior. The empirical results show that social security retirement benefits depress personal saving by approximately 13.5 thousand yen per capita in real terms from 1951 to 1982. However, declining labor force participation of the elderly (i.e., earlier retirement), stimulates personal saving by an estimated .5 thousand yen over the same period. The study finds that the benefit effect dominates the retirement effect. The net effect is consequently a downward impact on personal saving. The parameter estimates indicate that the retirement behavior induced by social security retirement benefits tends to become more sensitive and responsive to a rise in the benefits. In addition this study has identified a negative interdependency between the personal saving and labor retirement behaviors; that is, an individual saves more before retirement if he expects to stay a shorter time in the labor market, and vice versa. Moreover, personal saving influenced by retirement behavior tends to become less and less responsive, though the results indicate a relatively large response, and although very small, the retirement behavior gradually becomes more responsive to change in personal saving.

Suggested Citation

  • Tetsuji Yamada & Tadashi Yamada & Guorn Liu, 1990. "Determinants of Saving and Labor Force Participation of the Elderly in Japan," NBER Working Papers 3292, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:3292
    Note: LS
    as

    Download full text from publisher

    File URL: http://www.nber.org/papers/w3292.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Modigliani, Franco, 1986. "Life Cycle, Individual Thrift, and the Wealth of Nations," American Economic Review, American Economic Association, vol. 76(3), pages 297-313, June.
    2. Michael D. Hurd, 1990. "The Joint Retirement Decision of Husbands and Wives," NBER Chapters, in: Issues in the Economics of Aging, pages 231-258, National Bureau of Economic Research, Inc.
    3. Kotlikoff, Laurence J, 1988. "Intergenerational Transfers and Savings," Journal of Economic Perspectives, American Economic Association, vol. 2(2), pages 41-58, Spring.
    4. Noguchi, Yukio, 1983. "Problems of Public Pensions in Japan," Hitotsubashi Journal of Economics, Hitotsubashi University, vol. 24(1), pages 43-68, June.
    5. Leimer, Dean R & Lesnoy, Selig D, 1982. "Social Security and Private Saving: New Time-Series Evidence," Journal of Political Economy, University of Chicago Press, vol. 90(3), pages 606-629, June.
    6. Noland, Marcus, 1988. "Japanese Household Portfolio Allocation Behavior," The Review of Economics and Statistics, MIT Press, vol. 70(1), pages 135-139, February.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Hend Gabr & Fiona Carmichael & Hui Li, 2019. "A Multilevel Simultaneous Equations Modelling Approach to Investigate the Relationship between Poverty and Labour-Force Participation among the Elderly in Egypt," International Journal of Environmental Sciences & Natural Resources, Juniper Publishers Inc., vol. 22(1), pages 01-12, October.
    2. Julia Darby & Robert A Hart & Michaela Vecchi, 1998. "Labour Force Participation and the Business Cycle: A Comparative Analysis of Europe, Japan and the United States," Working Papers 9802, Business School - Economics, University of Glasgow.
    3. Darby, Julia & Hart, Robert A. & Vecchi, Michela, 2001. "Labour force participation and the business cycle: a comparative analysis of France, Japan, Sweden and the United States," Japan and the World Economy, Elsevier, vol. 13(2), pages 113-133, April.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Yamada, Tetsuji, 1990. "The effects of Japanese social security retirement benefits on personal saving and elderly labor force behavior," Japan and the World Economy, Elsevier, vol. 2(4), pages 327-363, December.
    2. Geri, Milva, 2022. "Pension arrangements and economic thinking: unreal assumptions and false predictions in the case of Argentina," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), April.
    3. Ohlsson, Henry & Roine, Jesper & Waldenström, Daniel, 2014. "Inherited Wealth over the Path of Development: Sweden, 1810–2010," Working Paper Series 1033, Research Institute of Industrial Economics.
    4. Päivi Kankaanranta, 2006. "Consumption Over the Life Cycle: A Selected Literature Review," Discussion Papers 7, Aboa Centre for Economics.
    5. Piketty, Thomas & Postel-Vinay, Gilles & Rosenthal, Jean-Laurent, 2014. "Inherited vs self-made wealth: Theory & evidence from a rentier society (Paris 1872–1927)," Explorations in Economic History, Elsevier, vol. 51(C), pages 21-40.
    6. Facundo Alvaredo & Bertrand Garbinti & Thomas Piketty, 2017. "On the Share of Inheritance in Aggregate Wealth: Europe and the USA, 1900–2010," Economica, London School of Economics and Political Science, vol. 84(334), pages 239-260, April.
    7. Arrondel, Luc & Masson, Andre, 2006. "Altruism, exchange or indirect reciprocity: what do the data on family transfers show?," Handbook on the Economics of Giving, Reciprocity and Altruism, in: S. Kolm & Jean Mercier Ythier (ed.), Handbook of the Economics of Giving, Altruism and Reciprocity, edition 1, volume 1, chapter 14, pages 971-1053, Elsevier.
    8. C. Simon Fan, 2006. "Do the Rich Save More? A New View Based on Intergenerational Transfers," Southern Economic Journal, John Wiley & Sons, vol. 73(2), pages 362-373, October.
    9. Anita Tiefensee & Christian Westermeier, 2016. "Intergenerational Transfers and Wealth in the Euro-Area: The Relevance of Inheritances and Gifts in Absolute and Relative Terms," Discussion Papers of DIW Berlin 1556, DIW Berlin, German Institute for Economic Research.
    10. Adrian Adermon & Mikael Lindahl & Daniel Waldenström, 2018. "Intergenerational Wealth Mobility and the Role of Inheritance: Evidence from Multiple Generations," Economic Journal, Royal Economic Society, vol. 128(612), pages 482-513, July.
    11. Robin Boadway & David Wildasin, 1994. "Taxation and savings: a survey," Fiscal Studies, Institute for Fiscal Studies, vol. 15(3), pages 19-63, August.
    12. John Laitner & Amanda Sonnega, 2010. "Intergenerational Transfers in the Health and Retirement Study Data," Working Papers wp238, University of Michigan, Michigan Retirement Research Center.
    13. von Werder, Marten, 2018. "Intergenerational transfers: How do they shape the German wealth distribution?," Discussion Papers 2018/15, Free University Berlin, School of Business & Economics.
    14. Mauricio De Rosa, 2022. "Accumulation, inheritance and wealth distribution: first estimates of the untold half," Documentos de Trabajo (working papers) 22-07, Instituto de Economía - IECON.
    15. Neil Cummins, 2022. "The hidden wealth of English dynasties, 1892–2016," Economic History Review, Economic History Society, vol. 75(3), pages 667-702, August.
    16. Michael D. Hurd, 1992. "Wealth Depletion and Life-Cycle Consumption by the Elderly," NBER Chapters, in: Topics in the Economics of Aging, pages 135-162, National Bureau of Economic Research, Inc.
    17. Laitner, John & Juster, F Thomas, 1996. "New Evidence on Altruism: A Study of TIAA-CREF Retirees," American Economic Review, American Economic Association, vol. 86(4), pages 893-908, September.
    18. H. Yigit Aydede, 2007. "Saving and Social Security Wealth: A Case of Turkey," NFI Working Papers 2007-WP-03, Indiana State University, Scott College of Business, Networks Financial Institute.
    19. Corneo, Giacomo G. & Bönke, Timm & Westermeier, Christian, 2016. "Erbschaft und Eigenleistung im Vermögen der Deutschen: eine Verteilungsanalyse," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 17(1), pages 35-53.
    20. Aaron, Henry J. & Munnell, Alicia H., 1992. "Reassessing the Role for Wealth Transfer Taxes," National Tax Journal, National Tax Association;National Tax Journal, vol. 45(2), pages 119-143, June.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:3292. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/nberrus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.