The Effects of Japanese Social Security Retirement Benefits on Personal Savings and Elderly Labor Force Behavior

Using Japanese annual time series data covering the period from 1946to 1982, this paper shows that social security wealth depresses personal savings. The effect was a reduction of approximately 143 thousand yen per capita wealth in real terms from 1970 to 1980. However, declining labor force participation of the elderly (i.e., earlier retirement), stimulates personal saving by an estimated 12 thousand yen over the same period. The study found that the benefit effect dominates the retirement effect. In addition, this study has identified a negative interdependency between the personal savings and labor retirement behaviors of the elderly; that is, an individual saves more before retirement if he expects to stay a shorter time in the labor market, and vice versa.

The Allocation of Time: Young Versus Elderly Households in Japan

Our study shows that the household production theory illuminates the behavior of households in the allocation of time and consumption expenditures. Among the noteworthy findings derived from our data, the various household non-market time allocations (consequently, market labor supply) cannot be separated from consumption expenditures. An increase in market wage rates for both young and elderly households reduces their time spent on household nonmarket activities, such as child care, medical care, and listening to the radio and watching TV. The high opportunity costs of waiting at the hospital clearly discourage working people from visiting the hospital. These results show not a few similarities between the household non-market time allocation in Japan and that to be found in the U.S.

Part-time Employment of Married Women and Fertility in Urban Japan

Previous studies of female labor force participation in Japan often show that the estimates of female wage rates are "negative" in their single-equation models of labor supply. Based on the common belief that the substitution effect dominates the income effect for female labor supply, to disentangle the problem of the inconsistency is, therefore, necessary for the purpose of predicting the behavior of female labor supply and for guiding policy actions. In this paper, we have estimated a logit model of married women's part-time employment and a fertility equation in the context of a simultaneous-equation model. By specifically differentiating part-time employed married women from full-time employed married women,we find that the structural coefficients of the part-time labor supply are significantly different from those of the full-time labor supply in terms of elasticity. However, contrary to the result of married women's full-time employment, we find little interdependency between married women's decisions to work as part-time employees and their fertility in urban Japan.

Estimation of a Simultaneous Model of Married Women's Labor Force Participation and Fertility in Urban Japan

A strong and negative correlation between married women's labor force participation and fertility has been witnessed in Japan in past decades. Relative to empirical studies of a traditional single equation on female labor supply, there exist few econometric studies dealing explicitly witha possible interdependency between married women's labor supply and fertility behaviors in urban Japan. Using the recently published 1980 Population Census of Japan, we have estimated a simultaneous-equation model of married women's labor force participation and fertility in urban Japan. Our model shows very satisfactory results to explain the negative correlation between those variables based on a method of 2SLS. Estimated labor supply elasticities for married women with respect to their fertility rates, wife's labor earnings, and male labor earnings are -0.67, 0.23, and -1.76 at the sample means, respectively. On the other hand, estimated elasticities of fertility with respect to married women's labor force participation and family income are -0.31 and 0.23, respectively. We find some of these elasticities for Japanese married women very comparable to those of married women in the United States.

Social Security and Earlier Retirement in Japan: Cross-Sectional Evidence

The estimated elasticity of the probability of retirement with respect to social security retirement benefits declines as individuals age. The negative impact of social security retirement benefits on full-time workers is much greater than the impact on part-time workers for all age groups. Earnings test in Japan is, therefore, more effective on full-time workers than part-time workers among the elderly. Social security retirement benefits also provide the elderly with an incentive to prolong their unemployment status. The marginal effect of the market unemployment rate on full-time work is significantly larger than that on part-time work and both effects are negative. The e1asticit.y of retirement with respect to the market unemployment rate for those in their 60's is two to three times larger than those aged 70 and over. Retirement of those in their GO'S is quite responsive to changes in labor market condition.