Household Saving Rate and Family Structure

This paper focuses a well known puzzle in Japanese household saving rate data, i.e., divergence between Family Income and Expenditure Survey (FIES; Kakei Chosa) and National Account Statistics (SNA). Using a life-cycle growth model augmented by a nuclear family structure assumption, this paper argues that the rise in the saving rate of FIES and the fall in that of SNA may be consistently understood by conventional economics. Extrapolation of the model suggests that the SNA saving rate probably continues to decline along with aging; prospect of the FIES rate is uncertain, however, depending on social environments such as soundness of pension funds and family structure