Increasing National Pension Premium Defaulters and Dropouts in Japan
This paper investigates why so many people are premium payment defaulters or dropouts from the national pension system using household-level data from a Japanese Government Survey. The major results can be summarized as follows: (1) the dropout probability of younger cohorts does not differ significantly from that of older cohorts; (2) the unemployed or jobless, individuals with few financial assets, and people who do not own their homes, i.e., borrowing-constrained individuals, are more likely to drop out from the national pension; and, (3) the probability of dropping out from the national pension system declines abruptly at around the age of 36.
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