IDEAS home Printed from https://ideas.repec.org/p/nbr/nberwo/2661.html
   My bibliography  Save this paper

The Effects of Japanese Social Security Retirement Benefits on Personal Savings and Elderly Labor Force Behavior

Author

Listed:
  • Tetsuji Yamada
  • Tadashi Yamada

Abstract

Using Japanese annual time series data covering the period from 1946to 1982, this paper shows that social security wealth depresses personal savings. The effect was a reduction of approximately 143 thousand yen per capita wealth in real terms from 1970 to 1980. However, declining labor force participation of the elderly (i.e., earlier retirement), stimulates personal saving by an estimated 12 thousand yen over the same period. The study found that the benefit effect dominates the retirement effect. In addition, this study has identified a negative interdependency between the personal savings and labor retirement behaviors of the elderly; that is, an individual saves more before retirement if he expects to stay a shorter time in the labor market, and vice versa.

Suggested Citation

  • Tetsuji Yamada & Tadashi Yamada, 1988. "The Effects of Japanese Social Security Retirement Benefits on Personal Savings and Elderly Labor Force Behavior," NBER Working Papers 2661, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:2661
    Note: LS
    as

    Download full text from publisher

    File URL: http://www.nber.org/papers/w2661.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Mitchell, Olivia S & Fields, Gary S, 1984. "The Economics of Retirement Behavior," Journal of Labor Economics, University of Chicago Press, vol. 2(1), pages 84-105, January.
    2. 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.
    3. Alan J. Auerbach, 1982. "Issues in the Measurement and Determinants of Business Saving," NBER Working Papers 1024, National Bureau of Economic Research, Inc.
    4. Mervyn A. King, 1983. "The Economics of Saving," NBER Working Papers 1247, National Bureau of Economic Research, Inc.
    5. Boskin, Michael J, 1977. "Social Security and Retirement Decisions," Economic Inquiry, Western Economic Association International, vol. 15(1), pages 1-25, January.
    6. Hamermesh, Daniel S, 1984. "Life-Cycle Effects on Consumption and Retirement," Journal of Labor Economics, University of Chicago Press, vol. 2(3), pages 353-370, July.
    7. Burkhauser, Richard V & Turner, John A, 1978. "A Time-Series Analysis on Social Security and Its Effect on the Market Work of Men at Younger Ages," Journal of Political Economy, University of Chicago Press, vol. 86(4), pages 701-715, August.
    8. Michael R. Darby, 1979. "The Effects of Social Security on Income and the Capital Stock," Books, American Enterprise Institute, number 936292, September.
    9. Martin Feldstein & Robert J. Barro, 1978. "The Impact of Social Security on Private Saving: Evidence from the U.S. Time Series," Books, American Enterprise Institute, number 936368, September.
    10. Noguchi, Yukio, 1983. "Problems of Public Pensions in Japan," Hitotsubashi Journal of Economics, Hitotsubashi University, vol. 24(1), pages 43-68, June.
    11. Alan J. Auerbach & Laurence J. Kotlikoff, 1981. "An Examination of Empirical Tests of Social Security and Savings," NBER Working Papers 0730, National Bureau of Economic Research, Inc.
    12. Hanoch, Giora & Honig, Marjorie, 1983. "Retirement, Wages, and Labor Supply of the Elderly," Journal of Labor Economics, University of Chicago Press, vol. 1(2), pages 131-151, April.
    13. Feldstein, Martin S, 1974. "Social Security, Induced Retirement, and Aggregate Capital Accumulation," Journal of Political Economy, University of Chicago Press, vol. 82(5), pages 905-926, Sept./Oct.
    14. 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.
    15. Thompson, Lawrence H, 1983. "The Social Security Reform Debate," Journal of Economic Literature, American Economic Association, vol. 21(4), pages 1425-1467, December.
    16. Gary Burtless, 1986. "Social Security, Unanticipated Benefit Increases, and the Timing of Retirement," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 53(5), pages 781-805.
    17. Marjorie Honig & Giora Hanoch, 1985. "Partial Retirement as a Separate Mode of Retirement Behavior," Journal of Human Resources, University of Wisconsin Press, vol. 20(1), pages 21-46.
    18. Pellechio, Anthony J, 1979. "Social Security Financing and Retirement Behavior," American Economic Review, American Economic Association, vol. 69(2), pages 284-287, May.
    19. Alan S. Blinder & Roger H. Gordon & Donald E. Wise, 1980. "Reconsidering the Work Disincentive Effects of Social Security," NBER Working Papers 0562, National Bureau of Economic Research, Inc.
    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. J L Ford & K Park & S Sen, 2009. "All Work and No Play: Pecuniary Versus Non-Pecuniary Factors in the Labour Supply of the Elderly," Discussion Papers 09-08, Department of Economics, University of Birmingham.
    2. Ashok Thomas & Luca Spataro, 2013. "Pension funds and Market Efficiency: A review," Discussion Papers 2013/164, Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy.

    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. Tetsuji Yamada & Tadashi Yamada, 1987. "Social Security and Earlier Retirement in Japan: Cross-Sectional Evidence," NBER Working Papers 2442, National Bureau of Economic Research, Inc.
    2. repec:eee:labchp:v:1:y:1986:i:c:p:305-355 is not listed on IDEAS
    3. Gál, Róbert Iván, 1996. "A társadalombiztosítási programok ösztönző hatásai [Incentive effects of social security programs: a survey]," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(2), pages 128-140.
    4. John P. Rust, 1989. "A Dynamic Programming Model of Retirement Behavior," NBER Chapters, in: The Economics of Aging, pages 359-404, National Bureau of Economic Research, Inc.
    5. 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.
    6. David Blake, 2004. "The impact of wealth on consumption and retirement behaviour in the UK," Applied Financial Economics, Taylor & Francis Journals, vol. 14(8), pages 555-576.
    7. Krueger, Alan B. & Meyer, Bruce D., 2002. "Labor supply effects of social insurance," Handbook of Public Economics, in: A. J. Auerbach & M. Feldstein (ed.), Handbook of Public Economics, edition 1, volume 4, chapter 33, pages 2327-2392, Elsevier.
    8. Marc Robinson, 1983. "Social Security and Physical Capital: An Interpretation of the Evidence, Lessons and Outlook," UCLA Economics Working Papers 307, UCLA Department of Economics.
    9. Charles S. Wassell, Jr., 2018. "Social Security and saving: A time-series econometrics pedagogical example (with code)," The Journal of Economic Education, Taylor & Francis Journals, vol. 49(1), pages 103-114, January.
    10. B. Douglas Bernheim, 1987. "Ricardian Equivalence: An Evaluation of Theory and Evidence," NBER Chapters, in: NBER Macroeconomics Annual 1987, Volume 2, pages 263-316, National Bureau of Economic Research, Inc.
    11. Catherine Cazals, 1994. "La retraite dans les modèles d'offre de travail : un survol de la littérature," Économie et Prévision, Programme National Persée, vol. 115(4), pages 43-62.
    12. Feldstein, Martin & Liebman, Jeffrey B., 2002. "Social security," Handbook of Public Economics, in: A. J. Auerbach & M. Feldstein (ed.), Handbook of Public Economics, edition 1, volume 4, chapter 32, pages 2245-2324, Elsevier.
    13. R. Glenn Hubbard & Kenneth L. Judd, 1985. "Social Security and Individual Welfare: Precautionary Saving, LiquidityConstraints, and the Payroll Tax," NBER Working Papers 1736, National Bureau of Economic Research, Inc.
    14. Momota, Akira, 2003. "A retirement decision in the presence of a social security system," Journal of Macroeconomics, Elsevier, vol. 25(1), pages 73-86, March.
    15. Laurence J. Kotlikoff & David A. Wise, 1988. "Pension Backloading, Wage Taxes, and Work Disincentives," NBER Chapters, in: Tax Policy and the Economy: Volume 2, pages 161-196, National Bureau of Economic Research, Inc.
    16. Sickles, Robin C & Taubman, Paul, 1986. "An Analysis of the Health and Retirement Status of the Elderly," Econometrica, Econometric Society, vol. 54(6), pages 1339-1356, November.
    17. Uthoff, Andras, 1996. "Promoción del ahorro y los sistemas de pensiones," Sede de la CEPAL en Santiago (Estudios e Investigaciones) 34258, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    18. Krueger, Alan B & Pischke, Jorn-Steffen, 1992. "The Effect of Social Security on Labor Supply: A Cohort Analysis of the Notch Generation," Journal of Labor Economics, University of Chicago Press, vol. 10(4), pages 412-437, October.
    19. John Rust & Christopher Phelan, 1997. "How Social Security and Medicare Affect Retirement Behavior in a World of Incomplete Markets," Econometrica, Econometric Society, vol. 65(4), pages 781-832, July.
    20. Feldstein, Martin, 1996. "Social Security and Saving: New Time Series Evidence," National Tax Journal, National Tax Association, vol. 49(2), pages 151-64, June.
    21. C. Lee, "undated". "The Expected Length of Retirement in the United States, 1850-1990," CPE working papers 0013, University of Chicago - Centre for Population Economics.

    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:2661. 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.