Do the aged dissave in Japan? Evidence from micro data

In this paper, we analyze the saving behavior of the aged in Japan using household-level data from a 1992 survey conducted by the Ministry of Posts and Telecommunications. We find (1) that although the employed aged continue to save, the retired aged are dissaving, on average, (2) that 60 percent of the aged in Japan have either a selfish bequest motive or no bequest motive at all, and (3) that the presence of a selfish bequest motive affects the behavior of both the retired aged and their children in the expected ways. All of these findings are fully consistent with the life cycle model J. Japan. Int. Econ., September 1996, 10(3), pp. 295-311. Institute of Social and Economic Research, Osaka University, Mihogaoka, Ibaraki, Osaka 567, Japan; Institute for Posts and Telecommunications Policy, Ministry of Posts and Telecommunications, Tokyo, Japan; and National Bureau of Economic Research, Cambridge, Massachusetts; and Ministry of Posts and Telecommunications, Tokyo, Japan.