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The division of bequests among family members differs sharply between Japan and the USA. Whereas in the USA, bequests tend to be divided equally among decedents’ children, they tend to be divided unequally in Japan. We start by arguing that certain legal and institutional aspects, which are not present in Japan, lead to equal bequests in the USA. We then investigate unequal patterns of bequest division in Japan to understand parental bequest motives. Utilizing institutional characteristics that are specific to Japan allows us to examine parental motives. We find that while the patterns of bequest division look generally consistent with most of the parental bequest motives suggested in the literature, such as the dynastic and the strategic motive, parents do not necessarily bequeath more to economically disadvantaged children.

The authors re-examine developments in two key elements of the Japanese employment system, seniority-based wages and lifetime employment, using recent microdata from the Basic Survey on Wage Structure. In contrast with previous studies, the authors find evidence that these practices are eroding. For seniority wages, for example, they find that the age–wage profile has become flatter in recent years, especially for employees in the middle and final phase of their careers. And for lifetime employment, a clear downward trend has developed since the early 2000s in the share of lifetime employees among younger, university-educated workers. The findings suggest that a growing share of educated younger workers choose to leave indefinite-contract jobs due to the poor prospects for seniority-based wage progression, while older workers choose to stay in their present job despite stagnating wages, because it may be more difficult for them to find alternative employment.

This paper reappraises Tachibanaki and Yokoyama (2008)—an empirical analysis indicating no apparent backward shifting of employer social insurance contributions—by modifying their empirical strategy. First, we control for a spurious positive correlation between wages and employers’ contribution rates by trend variables. Second, we utilize a cross-sectional variation in the contribution rate of workers’ compensation insurance. Third, we exclude two industries from our sample to remove sampling errors in wages. Our results indicate that the social insurance burden shifts back onto employees to some extent, contrary to Tachibanaki and Yokoyama (2008). Our finding is consistent with other existing studies.

This paper examines whether consumption reacts to an anticipated income increase arising from the start of pension benefit payments. Using household-level data, the analysis indicates that although consumption increases significantly in the year that pension benefit payouts start, it falls back to the previous level in later years. Further analysis shows that, consistent with the presence of bounded rationality, the consumption response to the start of pension payments of households for which pension benefits account for a relatively small proportion of their disposable income is more pronounced than for households which rely on pension benefits as their major source of income.

The aim of this chapter is to empirically examine the impact of health problems of the elderly on their own and their household's income. Using micro panel data from the \"Survey on Health and Retirement\" focusing on the elderly, we estimate the effect on an individual's income and his household's income of the number of illnesses respondents suffered in the three years preceding the survey, of suffering from a lifestyle disease, and of suffering from one of the three major \"killer diseases\" in Japan (cancer or malignant growth, heart disease, stroke or cerebrovascular disease). In order to deal with endogeneity in the health indicators, we employ survey respondents' body mass index at age 30 and their parents' medical history as instruments in the estimation and, when focusing on suffering from at least one of the three killer diseases, use respondents' body height as an additional instrument. In the estimation, we focus on male survey participants. The results suggest that an additional illness in the preceding years on average significantly reduced individuals' income. On the other hand, although the estimated coefficients on the effect of lifestyle diseases on individuals' income or household income were as expected negative, they were insignificant in both cases. Furthermore, when dividing observations into two subsamples ? men under the age of 60 and age 60 and over ? we find that in the case of the under 60s, a deterioration in health on average has no significant effect either on the individuals' own income or their household income. Likely reasons are that, if at all possible, such individuals will continue to work, or that any decline in income is offset by the spouse starting to work and/or the receipt of insurance payments. On the other hand, for men aged 60 and over, a deterioration in health has a significant impact on their own income, but that on household income is limited. That such individuals' own income declines is likely due to the fact that they are much more likely to stop working as a result of health problems, while the limited effect on household income may be due to the fact that the share of such individuals' income in total household income is relatively small.

This paper tries to quantitatively examine the impact of intergenerational transfers on asset inequality among Japanese households. For that purpose, we estimate an intergenerational asset transfer function with various control variables, using a unique micro dataset taken from the \"Household Survey on Family Relationships, Employment, Retirement Payments, and Intergenerational Transfers of Assets and Education,\" conducted by the Economic and Social Research Institute, Cabinet Office, Government of Japan. Employing three different models - a Tobit model, an interval regression model, and an ordered probit model - to ensure that our results are independent of the specific econometric approach used, we examine whether asset transfers received are correlated with households' financial strength. We find that higher income households are likely to receive larger asset transfers. However, the contribution of intergenerational transfers to asset inequality appears to be quantitatively limited when measuring financial strength in terms of households' life cycle wealth.

This paper tries to quantitatively examine the impact of intergenerational transfers on asset inequality among Japanese households. For that purpose, we estimate an intergenerational asset transfer function with various control variables, using a unique micro dataset taken from the \"Household Survey on Family Relationships, Employment, Retirement Payments, and Intergenerational Transfers of Assets and Education,\" conducted by the Economic and Social Research Institute, Cabinet Office, Government of Japan. Employing three different models - a Tobit model, an interval regression model, and an ordered probit model - to ensure that our results are independent of the specific econometric approach used, we examine whether asset transfers received are correlated with households' financial strength. We find that higher income households are likely to receive larger asset transfers. However, the contribution of intergenerational transfers to asset inequality appears to be quantitatively limited when measuring financial strength in terms of households' life cycle wealth.

The second \"Family and Lifestyle Survey\" is a registered consumer tester-based survey designed to collect information about (1) the basic attributes, education, job history, and quality of life of households in Japan; (2) household receipts of gifts and inheritances; (3) household income and expenditures; and (4) the employment history of respondents and their spouse, while also (5) inquiring into attitudes towards various policies such as the rise in the consumption tax rate and the child allowance policy. This survey is a follow-up survey of households that responded to the first survey carried out in 2011, allowing us to create a panel. This paper presents a summary of this most recent survey (the second round), including its objectives, questions, and methodology, along with basic tabulation results. In Appendix 1 at the end of the paper, we also briefly discuss the characteristics of survey subjects from which we were unable to obtain responses in this round of the survey.