The Impact of Population Aging on the Household Saving Rate: The Case of Japan

Charles Horioka

No DP2026-02, Discussion Paper Series from Research Institute for Economics & Business Administration, Kobe University

Abstract: This paper analyzes the impact of the age structure of the population on the household saving rate using time-series data for Japan for the 1955-2019 period. It finds that there is a cointegrating relationship between Japan's household saving rate and her dependency ratio (the ratio of the dependent population to the working-age population) and that the latter has a negative and statistically significant impact on the former. This implies that the life-cycle model applies in the case of Japan, that trends over time in the age structure of Japans's population can largely explain trends over time in Japan's household saving rate, that the downward trend in Japans household saving rate since the mid-1970s can largely be explained by the aging of her population, and that further population aging will lead to further declines in Japan's household saving rate, most likely into negative territory, in future years.

Keywords: Age structure of the population; Cointegration; Cointegrating vector; Household saving; Japan; Life-cycle hypothesis; Life-cycle model; Population aging; Saving rate; Unit roots (search for similar items in EconPapers)
JEL-codes: D12 D14 D15 E21 J11 (search for similar items in EconPapers)
Pages: 29 pages
Date: 2026-01
New Economics Papers: this item is included in nep-age
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https://www.rieb.kobe-u.ac.jp/academic/ra/dp/English/DP2026-02.pdf First version, 2025 (application/pdf)

Related works:
Working Paper: The Impact of Population Aging on the Household Saving Rate: The Case of Japan (2026)
Working Paper: The Impact of Population Aging on the Household Saving Rate: The Case of Japan (2026)
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