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Low fertility, human capital, and economic growth

Author

Listed:
  • Rob Clark

    (University of Oklahoma)

  • Naohiro Ogawa

    (Nihon University)

  • Rikiya Matsukura

    (Nihon University)

Abstract

Background: International research has shown that workers have a rather low level of financial literacy. Financial literacy is associated with lifetime planning and saving for retirement. This article focuses on the role of financial literacy in the demand for human capital and on-the-job training among older workers in Japan. Workers with higher levels of financial literacy are more likely to demand human capital, plan to enter training programs, and desire to work after retirement. Objective: Does financial literacy affect the demand for additional human capital among older Japanese workers? How does the level of financial literacy affect the age of retirement and plans for working after retirement from a career job in Japan? Methods: This paper analyzes data from a national survey of Japanese employees. We estimate the effect of financial literacy on the demand for additional human capital to remain competitive for promotions and for finding employment after retirement. Results: Higher levels of financial literacy are associated with greater demand for additional human capital and for participation in on-the-job training programs among older workers in Japan. Conclusions: Given the rapid aging of the Japanese population and the decline in the total population, providing employment opportunities for older workers (ages 60 and older) is a key to sustaining economic growth and per capita income. The analysis indicates that greater levels of financial literacy are associated with a desire for more training and human capital. Thus, enhancing the level of financial literacy among older workers may be a key to maintaining economic wellbeing.

Suggested Citation

  • Rob Clark & Naohiro Ogawa & Rikiya Matsukura, 2013. "Low fertility, human capital, and economic growth," Demographic Research, Max Planck Institute for Demographic Research, Rostock, Germany, vol. 29(32), pages 865-884.
    • Handle: RePEc:dem:demres:v:29:y:2013:i:32
    DOI: 10.4054/DemRes.2013.29.32
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    References listed on IDEAS

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    8. Lusardi, Annamaria & Mitchell, Olivia S., 2011. "Financial literacy around the world: an overview," Journal of Pension Economics and Finance, Cambridge University Press, vol. 10(4), pages 497-508, October.
    9. Robert L. Clark & Naohiro Ogawa & Makoto Kondo & Rikiya Matsukura, 2010. "Population Decline, Labor Force Stability, and the Future of the Japanese Economy," European Journal of Population, Springer;European Association for Population Studies, vol. 26(2), pages 207-227, May.
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    Cited by:

    1. Annamaria Lusardi & Olivia S. Mitchell, 2014. "The Economic Importance of Financial Literacy: Theory and Evidence," Journal of Economic Literature, American Economic Association, vol. 52(1), pages 5-44, March.
    2. Naohiro Ogawa & Sang-Hyop Lee & Rikiya Matsukura & An-Chi Tung & Mun Sim Lai, 2012. "Population aging, economic growth, and intergenerational transfers in Japan: how dire are the prospects?," Chapters, in: Donghyun Park & Sang-Hyop Lee & Andrew Mason (ed.), Aging, Economic Growth, and Old-Age Security in Asia, chapter 8, pages 231-276, Edward Elgar Publishing.
    3. Shimizutani, Satoshi & Yamada, Hiroyuki, 2020. "Financial literacy of middle-aged and older Individuals: Comparison of Japan and the United States," The Journal of the Economics of Ageing, Elsevier, vol. 16(C).
    4. Lee, Jaejoon, 2023. "Population aging in Korea: Importance of elderly workers," KDI Journal of Economic Policy, Korea Development Institute (KDI), vol. 45(2), pages 51-69.
    5. Fujiki, Hiroshi, 2020. "Are the actual and intended sources of financial knowledge the same? Evidence from Japan," Japan and the World Economy, Elsevier, vol. 55(C).
    6. Robert Clark & Melinda Morrill, 2013. "Increasing Work Life: The Role Of The Employer," Discussion Papers 13-016, Stanford Institute for Economic Policy Research.
    7. Hiroshi Fujiki, 2019. "Who needs guidance from a financial adviser? Evidence from Japan," Working Papers on Central Bank Communication 011, University of Tokyo, Graduate School of Economics.
    8. N Renuga Nagarajan & Mineko Wada & Mei Lan Fang & Andrew Sixsmith, 2019. "Defining organizational contributions to sustaining an ageing workforce: a bibliometric review," European Journal of Ageing, Springer, vol. 16(3), pages 337-361, September.
    9. Robert Clark & Rikiya Matsukura & Naohiro Ogawa, 2014. "Retirement Transitions In Japan," Discussion Papers 14-013, Stanford Institute for Economic Policy Research.
    10. Fujiki, Hiroshi, 2020. "Cash demand and financial literacy: A case study using Japanese survey data," Japan and the World Economy, Elsevier, vol. 54(C).
    11. Donghyun Park & Sang-Hyop Lee & Andrew Mason (ed.), 2012. "Aging, Economic Growth, and Old-Age Security in Asia," Books, Edward Elgar Publishing, number 15088, March.

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    More about this item

    Keywords

    human capital; financial literacy; on-the-job training; postretirement work;
    All these keywords.

    JEL classification:

    • J1 - Labor and Demographic Economics - - Demographic Economics
    • Z0 - Other Special Topics - - General

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