Unraveling the Factors Influencing Public Pension Knowledge: Findings from the World's Most Super-Aged Society

Understanding public pension schemes is crucial for effective pension reforms in advanced countries. However, despite Japan having the fastest ageing population in the world, there is limited research regarding people's actual levels of understanding of public pensions and their determinants. This study focuses on the knowledge of Japanese individuals who contribute to the pension system and future pensioners, as they play a key role in sustaining the Japanese public pension system. Public pension knowledge is examined in terms of test reliability and validity; the determinants are then analysed after controlling for individual-specific effects. The empirical results showed that the average number of correctly answered questions regarding Japanese public pensions was approximately 33%. This outcome is suboptimal because it shows that participants exhibited less-than-ideal levels of basic pension knowledge despite their contributions to the public pension system. This study also confirms that there are positive correlations between some independent variables regarding education and the level of public pension knowledge. The results suggest that education could be a potential policy tool to enhance pension knowledge and maintain a robust public pension system.