Charles Yuji Horioka

The Determinants of Household Saving in China: A Dynamic Panel Analysis of Provincial Data

In this paper, we conduct a dynamic panel analysis of the determinants of the household saving rate in China using a life cycle model and panel data on Chinese provinces for the 1995-2004 period from China?s household survey. We find that China?s household saving rate has been high and rising and that the main determinants of variations over time and over space therein are the lagged saving rate, the income growth rate, (in many cases) the real interest rate, and (in some cases) the inflation rate. However, we find that the variables relating to the age structure of the population have the expected impact on the household saving rate in only one of the four samples. These results provide mixed support for the life cycle hypothesis as well as the permanent income hypothesis, are consistent with the existence of inertia or persistence, and imply that China?s household saving rate will remain high for some time to come.

Why is Japan's household saving rate so high? A literature survey

Abstract This article surveys the literature on household saving in Japan and reviews the evidence concerning the various factors that have been suggested as possible causes of Japans high and rising household saving rate. Conceptual differences and deficiencies, the age structure of the population (especially the low proportion of the aged), the bonus system, and the rapid rate of income growth are found to be among the most important factors. Another finding is that Japans household saving rate is likely to continue its recent decline as many of the factors that helped raise it in the past become less applicable. J. Japan. Int. Econ. , March 1990, 4 (1), pp. 49–92. Institute of Social and Economic Research, Osaka University, 6-1 Mihogaoka, Ibaraki, Osaka 567, Japan, and National Bureau of Economic Research.

Why Is Japan's Private Saving Rate So High?

Publisher Summary A massive current account surplus is perhaps the most serious problem facing Japan today and is generating considerable discontent and protectionist sentiment abroad. There are many factors behind this current account surplus, but Japans saving rate, which is one of the highest in the world, has been suggested as a major cause. This chapter discusses the determinants of intercountry differences in private saving rates and based on this analysis, the relative importance of the various factors that have been suggested as possible causes of Japans high private saving rate is assessed and future trends in Japans private saving rate are projected. It presents data on household and private saving rates for the member countries of the Organization for Economic Cooperation and Development. The chapter also discusses the specification of the econometric model and presents the estimation results.

The Causes of Japan's Lost Decade: The Role of Household Consumption

In this paper, I analyze the causes of the prolonged slowdown of the Japanese economy in the 1990s and find that the stagnation of investment, especially private fixed investment, was the primary culprit. I then investigate the causes of the stagnation of household consumption during the 1990s and find that the stagnation of household disposable income, the decline in household wealth, and increased uncertainty about the future are among the contributing factors. Finally, I consider whether demand side factors or supply side factors were more important as causes of the prolonged slowdown of the Japanese economy in the 1990s and conclude that the former (especially misguided government policies) were probably more important.

Is the Eldest Son Different? The Residential Choice of Siblings in Japan **

In this paper, we analyze the determinants of the living arrangements (coresidence behavior) of elderly parents and their children (whether elderly parents live with their children, and if so, with which child) in Japan using micro data from a household survey. Our results provide support for all four explanations of coresidence behavior but especially for the life cycle and dynasty models (both of which assume selfishly motivated parents) and social norms and traditions: The fact that parents who were self-employed before retirement are more likely to live with their children, the fact that parents are less likely to live with sons who adopt their wifes surname, and the fact that parents are more likely to live with daughters whose husbands adopt their surname constitute evidence in favor of the dynasty model. The fact that parents who were (relatively wealthy) executives before retirement and parents who are homeowners are more likely to live with their children and the fact that parents are more likely to live with less educated children constitute evidence in favor of the selfish life cycle model (or the altruism model). And the fact that parental attitudes toward their children affect their coresidence behavior, the fact that parents are more likely to live with their eldest child if their eldest child is a son, and the fact that parents are most likely to live with their eldest son even if he is not the eldest child constitute evidence in favor of social norms and traditions.

Future trends in Japan's saving rate and the implications thereof for Japan's external imbalance☆

Abstract In this paper, I first present data on Japans saving rate and discuss the reasons for the high level thereof and the determinants of trends over time therein. I then survey recent attempts to project future trends in Japans saving rate and their impact on Japans current account surplus. The various studies agree that Japans saving rate will decline sharply in the coming years due to the rapid aging of her population and other factors and that her current account surplus will also decline (albeit less sharply than her saving will).

Saving for housing purchase in Japan

Abstract This paper analyzes the importance of saving for land/housing purchase in Japan. It finds that housing-related saving in the form of saving for the down payment and housing loan repayments is considerable but that it is roughly offset by dissaving in the form of depreciation of the housing stock. Thus, the contribution of housing-related saving to the aggregate household saving rate is negligible or even negative. J. Japan. Int. Econ. , September 1988, 2 (3), pp. 351–384. Institute of Social and Economic Research, Osaka University, 6-1, Mihogaoka, Ibaraki-shi, Osaka-fu 567, Japan.

Aging, Saving, and Public Pensions in Japan

We analyze the impact of population aging on Japans household saving rate and on its public pension system and the impact of that system on Japans household saving rate and obtain the following results: first, the age structure of Japans population can explain the level of, and past and future trends in, its household saving rate; second, the rapid aging of Japans population is causing Japans household saving rate to decline and this decline can be expected to continue; third, the pay-as-you-go nature of the public pension system, combined with rapid population aging, created considerable intergenerational inequities and increased the saving rates of cohorts born after 1965, which in turn slowed the decline in Japans household saving rate; and fourth, the 2004 public pension reform alleviated the intergenerational inequities of Japans public pension system somewhat but will in the long run exacerbate the downward trend in Japans household saving rate.

Capital Gains in Japan: Their Magnitude and Impact on Consumption

This paper estimates the magnitude of net capital gains on household wealth in Japan and then conducts an econometric analysis of their impact on consumption using national accounts data for the 1955-93 period. It finds that net capital gains on household wealth have been sizeable albeit volatile in Japan during this period and that their impact on consumption has been substantial especially during the late 1980s and early 1990s. The econometric analysis is one of the first cointegration analyses of Japanese consumption behavior and finds strong support for the life cycle/permanent income hypothesis. Copyright 1996 by Royal Economic Society.

The (Dis)Saving Behavior of the Aged in Japan

In this paper, I survey the previous literature on the saving behavior of the aged in Japan and then present some survey data on the saving behavior of the aged in Japan that became available recently. To summarize the main findings of this paper, virtually all previous studies as well as the newly available data I analyze find that the retired aged dissave and that even the working aged dissave, at least at advanced ages. Moreover, there has been a sharp increase in the dissaving of the retired aged since 2000, with the increase being due primarily to reductions in social security benefits, increases in consumption expenditures, and increases in taxes and social insurance premiums. These findings are consistent with the life-cycle model and suggest that this model is highly applicable (and becoming increasingly applicable over time) in the case of Japan.