Dissaving by the Elderly in Japan: Empirical Evidence from Survey Data

Abstract

This study empirically examines the (dis)saving behavior of the elderly in Japan using two micro-datasets of household surveys. The long-run dataset, which covers 20 years, indicates that on average, the elderly in Japan dissave, but the pace of dissaving of retired elderly is excessively slow in light of the standard life cycle/ permanent income hypothesis. Analysis results suggest that one likely factor is the desire to leave a bequest. The saving rate and pace of wealth decumulation show that retired households slowly dissave if the head plans to leave a bequest. Retired elderly who intend to have savings for precautionary purposes are unlikely to slowly dissave, except for those who do not plan to leave a bequest to their children.