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The Impact of Population Aging on the Household Saving Rate: The Case of Japan

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  • Charles Yuji Horioka

Abstract

This paper analyzes the impact of the age structure of the population on the household saving rate using time-series data for Japan for the 1955-2019 period. It finds that there is a cointegrating relationship between Japan’s household saving rate and her dependency ratio (the ratio of the dependent population to the working-age population) and that the latter has a negative and statistically significant impact on the former. This implies that the life-cycle model applies in the case of Japan, that trends over time in the age structure of Japan’s population can largely explain trends over time in Japan’s household saving rate, that the downward trend in Japan’s household saving rate since the mid-1970s can largely be explained by the aging of her population, and that further population aging will lead to further declines in Japan’s household saving rate, most likely into negative territory, in future years.

Suggested Citation

  • Charles Yuji Horioka, 2026. "The Impact of Population Aging on the Household Saving Rate: The Case of Japan," ISER Discussion Paper 1301, Institute of Social and Economic Research, The University of Osaka.
    • Handle: RePEc:dpr:wpaper:1301
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    File URL: https://www.iser.osaka-u.ac.jp/static/resources/docs/dp/DP1301.pdf
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    1. Peter C.B. Phillips & Sam Ouliaris & Joon Y. Park, 1988. "Testing for a Unit Root in the Presence of a Maintained Trend," Cowles Foundation Discussion Papers 880, Cowles Foundation for Research in Economics, Yale University.
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    Cited by:

    1. Charles Yuji Horioka, 2024. "Household Saving in Japan: The Past, Present, and Future," NBER Working Papers 33181, National Bureau of Economic Research, Inc.

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    More about this item

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • D15 - Microeconomics - - Household Behavior - - - Intertemporal Household Choice; Life Cycle Models and Saving
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts

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