Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/234914 
Year of Publication: 
2020
Series/Report no.: 
ISER Discussion Paper No. 1102
Publisher: 
Osaka University, Institute of Social and Economic Research (ISER), Osaka
Abstract: 
The selfish life-cycle model or hypothesis is, together with the dynasty or altruism model, the most widely used theoretical model of household behavior in economics, but does this model apply in the case of a country like Japan, which is said to have closer family ties than other countries? In this paper, we first provide a brief exposition of the simplest version of the selfish life-cycle model and then survey the literature on household saving and bequest behavior in Japan in order to answer this question. The paper finds that almost all of the available evidence suggests that the selfish life-cycle model applies to at least some extent in all countries but that there is more consistent support for this model in Japan than in the United States and other countries. It then explores possible explanations for why the life-cycle model is more consistently supported in Japan than in other countries, attributing this finding to government policies, institutional factors, economic factors, demographic factors, and cultural factors. Finally, it shows that the findings of the paper have many important implications for economic modeling and for government tax and expenditure policies.
Subjects: 
Age structure
altruism
bequest motives
borrowing constraints
consumption
culture
dissaving
dynasty model
elderly
family ties
household saving
inheritances
intergenerational transfers
Japan
life-cycle model
religiosity
retirement
Ricardian equivalence
saving motives
selfishness
social norms
JEL: 
D11
D12
D14
D15
D64
E21
J14
Document Type: 
Working Paper

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