Intergenerational Transfer, Social and Private, in Japan

Largely because of generational imbalance, the ageing population of Japan is one of the most urgent topics in social policy. My paper principally examines the relationship of social and private intergenerational transfers in Japan. I analyze two kinds of data. The first is that of the “Comprehensive Survey of People’s Living Conditions,” which was conducted by the Ministry of Health, Labour and Welfare, and the second is that of “National Survey of Living Conditions among Middle-Age and Old-Age People in 2010.”

The public pension system, which produces social transfers from the younger to the older generation, can be regarded as a form of intergenerational re-distribution. I first examine the extent that public pensions limit poverty among the elderly in Japan as a way to gauge the impact of public transfers in improving social equality. The main research question here is the extent to which public pensions reduce the risk of poverty as the generational imbalance worsens.

I study two-fold private transfers, co-residency and remittance. In Japan’s welfare society, the family has played a critical role in providing basic economic security to its members. The elderly have secured their economic well-being through co-residency with their off-spring. I examine how private transfers across generations, as in co-residency and remittance, have taken place. My second research question is whether such transfers have been enhanced by population aging. According to my preliminary result, the meaning of co-residency has now changed: the elderly are no longer always the beneficiaries of co-residency; rather, they retain the role of household head that provides basic economic well-being to the resident younger generation. Private transfers divide society rather than re-distribute resources, since the older generation provides more than the younger, and intergenerational imbalances in private transfers become more obvious as the population ages.