Adverse Impacts of Japan's Public Pension on Household Savings

概要

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This paper aims to investigate the adverse impact of public pension on household savings and to test whether public pension is subject to the Ricardian equivalence theorem in Japan. We reconsidered conventional framework for econometric modeling the inter-relationships between household savings and pension wealth. The magnitude of substantial reduction in household savings after 1974 is almost 1.6 times than before 1973 was revealed. On the other hand, through the test of the Ricardian equivalence theorem using GARCH-M model, two evidences were found. One is partial substitute relation between household savings and pension wealth. The other is the fact that conditional standard deviation of pension for the aged has been growing recently. From the latter finding, we might consider that the reliability for public pension scheme has been deteriorating.
福山大学の論文