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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

    (Research Institute for Economics & Business Administration (RIEB) and Center for Computational Social Science (CCSS), Kobe University, Institute of Social and Economic Research, Osaka University, Asian Growth Research Institute, JAPAN, and National Bureau of Economic Research, U.S.A.)

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 Japans's population can largely explain trends over time in Japan's household saving rate, that the downward trend in Japans 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," Discussion Paper Series DP2026-02, Research Institute for Economics & Business Administration, Kobe University.
    • Handle: RePEc:kob:dpaper:dp2026-02
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    References listed on IDEAS

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    11. Charles Yuji Horioka, 2000. "A Cointegration Analysis of the Impact of the Age Structure of the Population on the Household Saving Rate in Japan," The Review of Economics and Statistics, MIT Press, vol. 79(3), pages 511-516, August.
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    15. Charles Yuji Horioka & Luigi Ventura, 2024. "Do the Retired Elderly in Europe Decumulate Their Wealth? The Importance of Bequest Motives, Precautionary Saving, Public Pensions, and Homeownership," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 70(1), pages 187-212, March.
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    23. Niimi, Yoko & Horioka, Charles Yuji, 2019. "The wealth decumulation behavior of the retired elderly in Japan: The relative importance of precautionary saving and bequest motives," Journal of the Japanese and International Economies, Elsevier, vol. 51(C), pages 52-63.
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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.
    2. Charles Yuji Horioka, 2026. "The Past and Future of Japan's Household Saving Rate (in Japanese: 「日本の家計貯蓄率の過去と将来」)," ISER Discussion Paper 1305, Institute of Social and Economic Research, The University of Osaka.

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    Keywords

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    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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