The aging society, savings rates, and regional flow of funds in Japan

Shin-ichi Fukuda and Koki Okumura

Journal of the Japanese and International Economies, 2021, vol. 62, issue C

Abstract: This study examines the impact of population aging on regional savings rates in Japan, with particular attention to the regional flow of funds. Population aging has a positive impact on the average savings rate when the working-age population is large, it but has a negative impact when the working-age population decreases. Our empirical results, based on prefecture-level panel data, support the theoretical implication. After the mid-1990s, the working-age population declined, and the retired age population increased in many prefectures. As a result, population aging, which had a positive effect on the regional savings rate until the mid-1990s, came to have a negative effect thereafter. The empirical results suggest that in rural economies where deposits exceeded loans in the past, deposits are expected to decline due to the aging of society, resulting in a shortage of funds in the near future.

Keywords: Population aging; Savings rate; Regional flow of funds; Regional banks (search for similar items in EconPapers)
JEL-codes: E21 E44 G21 J11 O18 R11 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jjieco:v:62:y:2021:i:c:s0889158321000447

DOI: 10.1016/j.jjie.2021.101165

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