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The Effect of Pension Reform on Pension-Benefit Expectations and Savings Decisions in Japan

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  • Okumura, Tsunao
  • 奥村, 綱雄
  • Usui, Emiko
  • 臼井, 恵美子

Abstract

Using the Japanese Study of Aging and Retirement (JSTAR), a new Japanese panel survey of people age 50 or older, we find that many Japanese in their early 50s - compared with those in their late 50s and early 60s - expect their level of public pension benefits to decline. We find that recent pension reform, which raised the pensionable age, affected people by increasing the age when they expect to claim their benefits by almost the exact same amount for all. The reform decreases their expectations for public pension benefits, although this effect is not necessarily significant. We also find evidence that individuals’ anxiety about the public pension program’s future induces an increase in their private savings.

Suggested Citation

  • Okumura, Tsunao & 奥村, 綱雄 & Usui, Emiko & 臼井, 恵美子, 2012. "The Effect of Pension Reform on Pension-Benefit Expectations and Savings Decisions in Japan," CIS Discussion paper series 559, Center for Intergenerational Studies, Institute of Economic Research, Hitotsubashi University.
    • Handle: RePEc:hit:cisdps:559
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    Cited by:

    1. Marek Gora & Anna Ruzik-Sierdzinska, 2020. "Migration with pension reform expectations," Public Sector Economics, Institute of Public Finance, vol. 44(2), pages 203-219.
    2. Bertoni, Marco & Brunello, Giorgio & Mazzarella, Gianluca, 2018. "Does postponing minimum retirement age improve healthy behaviors before retirement? Evidence from middle-aged Italian workers," Journal of Health Economics, Elsevier, vol. 58(C), pages 215-227.
    3. Zhao, Weimin & Chen, Na, 2024. "Does old-age security promote rural residents' consumption? A decomposition based on contribution and replacement rates," Economic Analysis and Policy, Elsevier, vol. 82(C), pages 817-830.
    4. Marco Bertoni & Giorgio Brunello, 2014. "Pappa Ante Portas: The Retired Husband Syndrome in Japan," "Marco Fanno" Working Papers 0182, Dipartimento di Scienze Economiche "Marco Fanno".
    5. Tsunao Okumura & Emiko Usui, 2014. "The effect of pension reform on pension-benefit expectations and savings decisions in Japan," Applied Economics, Taylor & Francis Journals, vol. 46(14), pages 1677-1691, May.
    6. Elinder, Mikael & Hagen, Johannes & Nordin, Mattias & Säve-Söderbergh, Jenny, 2020. "Who lacks pension knowledge, why and does it matter?," Working Paper Series 2020:24, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    7. Emiko Usui & Satoshi Shimizutani & Takashi Oshio, 2016. "Are Japanese Men of Pensionable Age Underemployed or Overemployed?," The Japanese Economic Review, Springer, vol. 67(2), pages 150-168, June.
    8. Anping Chen & Nicolaas Groenewold, 2017. "An increase in the retirement age in China: the regional economic effects," Applied Economics, Taylor & Francis Journals, vol. 49(7), pages 702-721, February.
    9. Norton, E.C., 2016. "Health and Long-Term Care," Handbook of the Economics of Population Aging, in: Piggott, John & Woodland, Alan (ed.), Handbook of the Economics of Population Aging, edition 1, volume 1, chapter 0, pages 951-989, Elsevier.
    10. Lei Yan & Xubin Lei & Kairong Hong & Hui Li & Mengyuan Chen, 2022. "Improving Farmer Willingness to Participate in the Transfer of Land Rights in Rural China: A Preference-Based Income Distribution Scheme," Land, MDPI, vol. 11(3), pages 1-22, March.
    11. Bertoni, Marco & Brunello, Giorgio, 2017. "Pappa Ante Portas: The effect of the husband's retirement on the wife's mental health in Japan," Social Science & Medicine, Elsevier, vol. 175(C), pages 135-142.
    12. Okumura, Tsunao & Usui, Emiko, 2021. "Pension Expectations and Household Portfolio Choice of the Elderly in Japan," CIS Discussion paper series 694, Center for Intergenerational Studies, Institute of Economic Research, Hitotsubashi University.
    13. Madeira, Carlos, 2022. "The impact of the Chilean pension withdrawals during the Covid pandemic on the future savings rate," Journal of International Money and Finance, Elsevier, vol. 126(C).
    14. Junya Hamaaki, 2013. "The Pension System and Household Consumption and Saving Behavior," Public Policy Review, Policy Research Institute, Ministry of Finance Japan, vol. 9(4), pages 687-716, September.
    15. 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.
    16. Chen, Fengming & Wakabayashi, Midori & Yuda, Michio, 2024. "The impact of retirement on health: Empirical evidence from the change in public pensionable age in Japan," The Journal of the Economics of Ageing, Elsevier, vol. 28(C).

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    More about this item

    Keywords

    subjective expectations; pension reform; uncertainty; savings;
    All these keywords.

    JEL classification:

    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions

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