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Identifier to cite or link to this item: https://hdl.handle.net/10086/17119

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Title
Understanding the Decline in the Japanese Saving Rate in the New Millennium
Creator
Creator Name
Iwaisako, Tokuo Iwaisako, Tokuo
祝迫, 得夫 祝迫, 得夫
イワイサコ, トクオ イワイサコ, トクオ
Affiliation
Affiliation Name
Hitotsubashi University
Creator Name
Okada, Keiko Okada, Keiko
岡田, 恵子 岡田, 恵子
オカダ, ケイコ オカダ, ケイコ
Affiliation
Affiliation Name
Hosei University
Editor
Contributor Name
日本経済の物価変動ダイナミクスの解明 = Understanding Inflation Dynamics of the Japanese Economy
Key Word
Japanese Saving Rate
Life-Cycle Model
Corprate Saving
The 'Lost Decade'
Income Distribution
Household Saving
JEL
E2
E6
J4
Abstract
This paper investigates why the Japanese household saving rate, which fell from the late 1990s to the first few years of the new millennium, suddenly stabilized after 2003. Analyzing income and spending data for different age groups, we argue that this is explained by Japanese corporate restructuring prompted by the 1997 financial crisis and the resulting labor income decrease being concentrated in older working households. We believe two important changes in income distribution are associated with this mechanism. First, the negative labor income shock, which was mostly borne by the younger generation in the initial stages of the "lost decade" finally spread to older working households in the late 1990s and early 2000s. Second, there was a significant income shift from labor to shareholders associated with corporate restructuring during this time. This resulted in a decline in the wage share, so that the increase in corporate saving offset the decline in household saving.
Description
39846
This Draft: February 2009; First Draft: October 2008
Publisher
Research Center for Price Dynamics, Institute of Economic Research, Hitotsubashi University
Issued Date
2009-03-30
Language
English(eng)
Resource Type
technical report
Version Type
VoR
Is Part OfRelation -
Related Title
Working Paper Series ; No. 34
Number of Pages
16
Sponsorship
日本学術振興会・科学研究費補助金（学術創成研究費） = JSPS Grant-in-Aid for Creative Scientific Research
Edition
Revised: February 2009
Appears in Collections
Working Paper Series / Understanding Inflation Dynamics of the Japanese Economy
URL
https://hdl.handle.net/10086/17119