Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/230474
Authors: 
Horioka, Charles
Niimi, Yoko
Year of Publication: 
2019
Series/Report no.: 
ISER Discussion Paper No. 1068
Abstract: 
In this paper, we analyze the borrowing behavior of Japanese households in comparison to the other Group of Seven (G7) countries and also broken down by the age group of the household head. We find that pre-retirement households (households with a head in the 50-59 age group) in Japan do not have inordinate amounts of debt and that their financial health is satisfactory. However, we also find that households with a head in the 30-39 age group have shown a sharp increase in debt holdings in recent years, due partly to the fact that tax breaks for housing purchase, reforms in the housing loan market since the early 2000s, and expansionary monetary policy enabled Japanese households to purchase housing at a younger age than they could previously. We therefore need to monitor the borrowing behavior of this cohort over time as the Bank of Japan normalizes its monetary policy, especially since households have become more vulnerable to rising interest rates as the share of households who have chosen variablerate housing loans has increased in recent years.
Subjects: 
aging
borrowing
debt
homeownership
households
housing
Japan
liabilities
loans
mortgages
retirement
JEL: 
D14
E21
G51
J14
R21
Document Type: 
Working Paper

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