Chapter 5 - Household Savings and Wealth Distribution in Japan

Abstract

This chapter focuses on the household savings and wealth distribution in Japan, explaining saving rates by income class and the construction of social-security wealth. In the National Survey of Family Income and Expenditure (NSFIE), gross yearly income includes wages and salaries, income through business and work at home, returns from assets, social-security benefits, donations, and consumption in kind. Japan's saving rate is not as high as is commonly thought. The accumulation of wealth by Japanese households starts very early and lasts until very late in life, with unconsumed wealth transferred to the next generation in the form of bequests. Motivation for the acquisition of owner-occupied housing remains strong, and this promotes high saving, especially because of limited mortgage markets and high down-payment requirements. The most discussed data problem with the NSFIE is the sample selection bias with old households.