Hitotsubashi University Repository

TitleInternational Comparison of Saving Ratios by

Occupational Groups (II)

Author(s) Mizoguchi, Toshiyuki

Citation Hitotsubashi Journal of Economics, 8(1): 27-40

Issue Date 1967-06

Type Departmental Bulletin Paper

Text Version publisher

URL http://hdl.handle.net/10086/8062

Right

INTERNATIONAL COMPARISON OF SAVlNG RATIOS BY OCCUPATIONAL GROUPS (ID*

By TOSHIYUKI MIZOGUCH1**

I11. Saving Ratios of Self-Employed Families

It hus been an imporLant topic in the analysis of the consumption function to examine

the saving ratios in self-employed families. Some papers proved that the average propensity

to consume was lower in these families than in workers' families.13 Interesting assertions

have also been made by Japanese economists, depending on the experience of Western de-

veloped countries. When we investigate the national accounts statistics published by the

United Nations, the percentage of wage-type income in total personal income (W-Pratio) is

lower in Japan than in most Western developed countries, as is shown in Table 12. If the saving

TABLE 12. COMPARISON ol* RA1'ros or* WAGE-11'YI'E INCOlvlE IN PERSO*N!~L INCOlvlE

Source: U.N.. Yearbook of National Accounts Statistics, 1965.

* The first part of this paper was published in this Journal, February, 1967.

** Assistant Professor (Jokyo~ju), Institute of Economic Research.

18 For example see Klein. L. R., and Margolis. J., "Statistical Studies of Un mcorporated Buslnesses "

Reviezv of Econo'nics and Statistics, February, 1954.

28 HITOTSUBASHI JOURNAL OF EcoNoMlcs [June ratios are similar among the countries by occupational groups, the lower percentage of wage-

type income induces the higher personal saving ratio, and this can explain the high personal

saving ratio in Japan.14 In order to support this assumption, we must compare the saving ratios of self-employed families among the countries. In this examination, it is desirable to

divide the self-employed families into at least two sub-groups: the farm families and the non-

farm self-employed families, because the saving behavior is considered to be different between

these groups and the number of households in the latter group is too large to be neglected,

even in Japan in recent years.

First let us compare the saving ratios of farm families. The international comparison is

more difficult in this group than in the case of workers' families because of the scarcity of

statistical materials. There are some family budget surveys on farm families, but most of

them give no information on their incomes. We can find only three family budget surveys

on farm families for our purpose: in Finland, the Ryukyu and the United States.15 Two

family saving surveys in Sweden and India can be used as additional information. In addi-

tion, special surveys on farm families, called the Fartn Household Economic Survey (NOKA

KEIZAI CHOSA in Japanese), can be found in Japan, Taiwan and South Korea. These surveys attempt to compile comprehensive figures on activities of farm families; farm produc-

tions, investments, incomes, consumptions, assets and liabilities, etc. Therefore, we can get

statistics on the saving ratios of farm families in eigllt countries, as is shown in Table 13.

Another difficulty arises from the different definitions of farm households. As the scales of

farms or the production techniques are very different among the countries, it is difficult to

TABLE 13. STATISTICAL MATERIALS FOR THE ANALYSIS OF SAVlNG RATIOS OF FARM FAMILIES

Note: 1) The sample sizes shown in this table are those in recent publications and they have been fluctuating year by year, though the ranges are not too large.

2) The letters in the column "type of survey" indicate as follows; FH: the farm house-hold economic survey. FB: family budget survey, S: family saving survey, BS: the surveys with balance sheets shown in Table 1, WBS: the surveys without the balance sheets.

3) All surveys, except the earlier surveys in China (Taiwan) and Korea (South), adopt the random sampling technique.

4) As for the data sources, see the reference lists shown in the final part of this paper.

14 See, Miyohei Shinohara, Growth and Cycles in the Japanese Economy, Kinokuniya, 1962. 15 There are some family budget surveys with income information including farm families, but without

occupationa] classifications. These surveys are found in the Phillippines, Thailand and in some African

countries.

1967] INTERNATIONAL COMPARISON OF SAVING RATIOS BY OCCUPATIONAL GROUPS (n) 29

define the self-employed farm families. In this paper, although employed farm labourers are

excluded, the other definitions in each country are used without any adjustments. Some reserva-

tions are necessary, therefore, in the following conclusions. We must also consider the definition

of income and saving in each survey. As the amount of depreciation of business equipment

is not negligible among farm families, the saving ratios would be different in the gross concept

or in the net concept defined in Table 3. All surveys, except the Farm Economic Household

Survey in Japan, adopt one of the two definitions, and it is very difiicult to adjust them to

the same concept. In the following analysis, some tentative adjustments will be indicated,

but some errors are inevitable.

Let us now proceed to the international comparison of saving ratios of farm families.

The saving ratios with brackets are calculated by supposing a 5% depreciation rate for farm

equipment,16 and the others are referred from the orig'inal data. Investigating this table, the

saving ratio of Japanese farm families is not necessarily higher than in the other countries.

TABLE 14. SAVlNG RATIOS OF FARM FAMILIES

Note: 1. a) adjusted for depreciation on residential houses and consumer durables, b)

excludlng the increase of cash.

Further, a comparison of Table 14 with Table 5 shows an interesting result. Generally speak-

ing, the saving ratios are higher in the farm families than in workers' families, though the

incomes of farm families are lower than those of workers' families. A noticeable exception

can be found in the Japanese case. The saving ratios of farm families are significantly lower

than in workers' families in this country. In view of this, it may prove interesting to de-

cornpose the saving ratios. As the data for such a purpose are not too abundant, it is

dangerous to assert decisive conclusions, but a comparison of figures in Table 15 with those

in Table 9 does give some suggestions. The higher saving ratios in farm families originate

mainly from the investment ratios in farm families. In contrast with farm families in the

other countries, the net business investment ratio is negative in Japan, and this low ratio

explains why the saving ratios are lower in farm families than in workers' families in Japan.

This fact may be partially explained by the higher depreciation ratios adopted in the Farrn

Household Economic Survry in Japan. That is, the average depreciation ratiolT in 1961 was

16 A 5~/o depreciation rate is adopted in the family budget surveys in the United States in 1961.

17 This ratio is calculated by dividing the total depreciation values by the book values of the farm

equipment.

30

TABLE

IlITOTSUBASnl JOURNAL OF EcoNOMICS

15. SAVING RATIOS BY THEIR CoMPONEN1'S OF FARM FAMILIES

[ June

Per Capita Personal Income ('60 U.S. $)

L{quid Type Saving Ratio (~)

Life Insurance Premium Ratio (~6)

Investment Ratio (Personal Use) (~)

Business Investment Ratio (~;~)

Decrease of Liabilities' Ratio (%)

} }

Gross

Japan 1961

315

16. 2

6.

-2.

7

4

Concept

Sweden 1 958

632 1. 3 O. 7 1. 7

28. 3

-12. 7

about 10% and this is rather higher than the ratio in the United States. But a more funda-

mental reason should be found in the recent tendencies in the economic behaviour of Japanese

farm families. The rapid growth of the economy in post-war Japan has increased the income

differentials between the urban sector and the rural sector. Therefore. Japanese farmers tend

to increase their incomes by working for enterprises in the urban sector, and the farm labour

has been supplied by their wives or aged labourers, whose wdges in the urban sector are not

too high yet. This fact can be investigated numerically in the time-series analysis of the

Fal-m Housel,old Economic Survey in Japan. For example, the percentage of farm income in total income in farm households has been rapidly decreasing in recent years in Japan, as

is shown in Figure 3. Since the scale of farms in Japan is generally small, it is difficult to

FIG. 3. TIME-SERIES CHANGES OF FARM INCOME IN TOTAL INCOME OF JAPANESE FARM FAMILIES

(%) 100

90

80

70

60

50

40

30

o

Non-Farm Income

Farm Income

'52 '5 5

'6 o ( Year )

Note: As the survey method of Far,,1 Household Economic Survcy in Japan was revised twice, we cannot use the original data for a time-series.

This figure is written by using a special link technique calculated by the

Statistical Section. Institute of Economic Research. Hitotsubashi University.

1967］ lNTERNATIONAL　COMPARISON　OF　SAVING　RATIOS　BY　OCCUPAT10NAL　GROUPS（II） 31

increase　their　productivity　by　business　investment　as　rapidly　as　the　growth　of　real　income　in

the　urban　sector．The　incentive　to　invest　ln　farming，therefore，is　not　very　great．In　addi・

tion，some　farmers　decreased　their　land　by　selling　to　the　urban　sector　because　of　the　scarcity

of　farm　labour．The　rise　of　land　prices，which　was　mentioned　in　Section　II，accelerates　this

tendency．Amorecomprehensivemodelwouldbenecessarytoexplainthisphenomenon，because　the　economic　behaviour　of　farm　families　in　recent　years　in　Japan　is　very　complicated．

But　it　may　be　safely　said　that　the　saving　ratios　in　Japanese　farm　families　are　not　higher　than

those　in　the　other　countries　and　that　the　business　investment　ratios　in　Japan　are　significantly

lower　than　in　the　Westem　developed　countries．

　　　　Further，some　investigations　of　the　factors　explaining　the　differences　of　saving　ratios　in

farm　families　among　the　countries　should　be　made．One　approach　may　be　to　make　the　ngure

of　time・series　changes　of　saving　ratios　of　farm　families　corresponding　to　Figure1，The　result

shown　in　Figure4seems　to　be　similar　to　that　shown　in　Figure1，though　the　number　of

FIG．4，TIME－sERIEs　CHANGEs　oF　SAvING　RATlos　oF　FARM　FAMILIEs　　　　　　　　　　　　（A）　51／ツ　　　　　　　　　　　　　　　　　（B）　52／ツ

）【」

％2

20

15

10

5

0

　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　（％）　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　穏糊61

　　　　　　，63　　　　　　　　　　　　　　　　　　　25

　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　窟　　噂1

　　　　　　摩　　　　2。　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　’62　　　　　　，62　　　　　　　Sweden　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　，61　　　　　　　　　　　　　　　　　　　’41　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　互呂窪魯嘉9　　　　　　　　　　　　　　　　’58煽161　15

　　　　曙　　　　ロ　　　　き　　　’ξ

　　　←　　　　　　・61　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　少52，57　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　10

　　　　　　　郵9　　5　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　躍　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　娼

　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　●召　P61

　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　←β　．

In－ia．

　　’638　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　Fin1an己，59　　　　　＆’61　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　，63

　　　　著，　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　0

　　50　100　　　．5001，0002，000　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　50　100　　　　500　1・0002・000　　　　　，63　　　　　Finland，58　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　’54　（PerCapitalnc。me，’60U．S．＄）　　’54（PerCapitalnc。me，，60U，S．＄）

　　　　　Note；　L　　×一×：in　gross　conceptン　・一・；in　net　concept

　　2．As　for　the　Japanese　case，see　the　note　in　Figure3。

samples　in　this　complete　Hgure　ls　not　enough．　The　next　examlnation　is　to　correlate　the

saving　ratios　with　factors　adopted　in　the　analysis　in　Table6，but　the　result　is　not　too　suc・

cessfuL　Apartofthismaybecausedbythedecisionprocessofbusinessinvestment．Asis　shown　in　Table15，the　share　of　business　investment　is　rdatively　large　in　the　total　saving

of　farm　families．This　mtio　is　considered　to　depend　on　the　production　techniques　and　on　the

scales　of　farms，so　the　total　saving　ratios　would　not　necessarily　be　explained　by　the　income

conditions　of　farm　famihes．　In　this　respect，it　is　important　to　point　out　that　the　liquid・type

saving　ratios　are　correlated，to　some　extent，with　the　growth　rates　of　real　income　of　agricul－

ture　and　forestry，

　　　Now　Iet　us　proceed　to　the　intemational　comparison　of　the　saving　ratios　of　the　non・farm

32 HITOTSUBASHI JOURNAL OF ECONOMICS [June self-employed families. This family group is sub-divided again into two sub-groups; i.e., the

non-farm entrepreneur families and professional families. However, there is not very much

statistical materials on these groups. We can find three family budget surveys on these groups

in the Ryukyu, the United Kingdom, and the United States, as well as the four family saving

surveys in India. Japan, the United Kingdom and the United States. These surveys are listed

in Table 16. In examining the saving ratios of these groups, there are difficulties similar to

TABLE 16. DATA FOR THE ANALYSIS OF SAVING RATIOS OF

NoN-FARM SELF･EMPLOYED FAMILIES

Note: 1. As for the letters in the column "Type of Survey" see note m Table 13 2. The letters in the column "Scope of Survey" are as follows: E; Non-farm self-employed

entrepreneurs'. P; professionals', SE; Non-farm self-employed families.

those encountered in the case of farm families; i.e, the differences between the definitions of

occupations and between the net concepts and the gross concepts.

First, Iet us compare the saving ratios. Though the number of countries in Table 17 is

not enough to get any conclusive results, some suggestions can be found. It should be noted

that the saving ratios in Japan and the Ryukyu are much higher than in the other countries.

TABLE 17. SAVlNG RATIOS 017 NoN-FARM SELF-EMPLOYED FAMILIES

Non-f arm Self･employed Entrepreneurs

India

Japan

Ryukyu Sweden U. K.

U. S. A.

1960

1963

1964

1958b)

1962")

19eo/,61

93

(277)

(1, 235)

l, 140

2, 340

5. 4

(24. 8)

(11. 8)

10. O

11. l

5. 5

(31 . 4)

(22. 3)

17. O

22. 3

326

249

1, 315

29.

32.

19.

9c) d]

2 3c]

36 .

34.

30.

5c) d]

3 3c]

Prof essionals

Japan

Ryukyu U. S. A.

1963

1964

1960/'61 2, 540 8. 8

20. 5

522

737

31.

59 .

Oc) d)

7c)

35.

63.

lc] d)

2c)

Note: 1, a) Including the Excluding the increase of cash,

2. The figures in ( ) are

professionals, b) Including the families without

d) Excluding the sales of business buildings .

estimated by using information other than that

occupations, c)

in the surveys.

1967] INTERNATIONAL colt,IPltRrsoN OF SAVlNG RATIOS BY OCCUPATIONAL GROUPS (n) 33

Some papers have suggested that the saving ratios in the non-farm self-employed families may

be very high in Japan, though these papers do not support their suggestions with rigid inter-

national comparisons.18 The result in Table 17 supports these previous suggestions; that is,

the saving ratios of self-employed entrepreneurs are much higher in Japan and the Ryukyu

than in the other countries. This fact may be related to the high speed growth of their

income in Japan and the Ryukyu. When we calculate the average annual growth rates of

real income in commerce in the four years before the surveys, the values in the two countries

are above 10%, but they are under 5% in the other countries. The higher levels of the

saving ratios of the professional families may be explained by same reason, but an additional

factor should be mentioned. A distinguishing characteristic of Table 18 is the surprisingly

TABLE 18. lr~AC'rORs DETERMINING Tl~E SAVING RATIOS Or

NoN-FARM SELF-EMPLOYED ENTREPRENEURS (Unit: ~~)

Note: 1. As for the definitions of variables, refer to Table 6.

high saving_ ratios of professional families in the Ryukyu, and these figures may be explained f i we compare their incomes with those of workers famllres The number of persons belong-

ing to the porfessional category is re]atively large in the Western developed countries, especi-

ally in the United States. But in the less developed countries, such as the Ryukyu, only a

limited number of people engage in the professions and the relative difference between their

income levels and those of other occupational groups tends to be greater than in developed

countries. The same tendency can be also found in Japanese professional families, though

the income differences are not so significant as in the Ryukyu.

It is desirable to attempt again to decompose the saving ratios of these groups, The

figures in Table 19 suggest that the liquid-type saving ratios in Japan are very high, but the bisiness investment ratios as well as the investment ratios for personal uses are not too large.

This result is very similar to the special characteristics of Japanese workers' families, and

may be related to the high speed growth of the Japanese economy. However, in the case of

self-employed families, the financial conditions should also be considered as a supplemental

factor, It is commonly said that the high speed growth in post-war Japan was supported by

the increase of bank loans to large enterprises. In fact, the demand for liquid-type capital

is quite considerable large in Japanese enterprises in order to supply the funds for large scale

investments in equipments. As a result, the loan funds for small merchants or artisans are

rs See, for example, M. Shinohara, Growth and Cycles in the Japanese Economy, op., cit., Ryutaro Komiya, Post-War Japanese Economic Growth, University of California Press, 1966, Ch. 8.

34 HITOTSUBASHI JOURNAL OF EcoNoMlcs

TABLE 19. SAVING RATIOS BY THEIR COMPONENTS OF NoN-FARM SELF-EMPLOYED FAMILIES

[ J u ne

(Unit: ~o)

Note: 1. a) including the increase of cash, b) excluding the increase of bonds, c) including

the increase of bonds, d) the depreciation of business buildings is not deducted.

very restricted, and it is difficult for them to get loans or credits to their desired amounts.

Further, the interest rates for them are said to be very high compared with the other countries.

In some cases, they are even asked to save some amount of tirne-deposits as a guarantee for

loans from banks, (this strange financial system is called BUZUMI and RYODATE in Japanese).

These financial restrictions tend to induce an increase in the level of the "desired stocks" of

saving among Japanese merchants and artisans. As is shown in Table 20, the saving-stock-

TABLE 20. SAvlNG STOCKS INCOME RATIOS OF SELF EMPLOYED FAMILIES (Unit: ole)

Note: 1. F: farm famllies, NF, non-farm self-employed families. A: all families.

income ratios in liquid-type saving are not lower in Japan than in the other countries. But,

remembering the financial restrictions mentioned above, the stocks of liquid-type savings are

rather lower than the desired ratios in Japan. Further, the higher rate of income growth

requires higher flow saving ratios in order to keep the saving-stock-income ratios constant.

These assertions would not be enough to explain the significantly high levels of saving ratios

of Japanese non-farm self-employed families, but the writer thinks that the problem will be

solved if we examine the reason why the liquid type saving ratios are very high in the non-

farm self-employed families as well as in workers' families in Japan.

Returning now to the initial topic, Iet us examine whether higher personal saving ratios

in Japan can be explained by the large share of non-wage-type income in total personal in-

come. As the saving ratios are higher in non-farm self-employed families than in workers'

1967] INTERNATIONAL COMPARISON OF SAvlNG RATIOS BY OCCUPATIONAL GROUPS (n) 35

families in Japan, the initial assumption is supported by the data for these groups. But the

results for farm families have the opposite implication; that is, the saving ratios of the farm

families are significantly lower than in the workers' families in this country. As the number

of farm families is much larger than that of the non-farm self-employed families, the average

result gives a pessimistic answer for the assertion. When we calculate the saving ratios of

self-employed families, the Japanese values are not too much higher than those in Sweden and

the United States, as was indicated in Table 17. Therefore, it is dangerous to assert some

hypotheses by using the national accounts statistics without any detailed examinations.

TABLE 21. COMPARISON OF SELF-EMPLOYED FAMILIES IN JAPAN, SWEDEN AND THE UNITED STATES

(Unit: ~)

Note: l. Average saving ratios of all self-employed families are calculat8d by the ratios of

weighted average of savings to weighted averages of income with distribution of the number of households.

IV. Saving Ratios of Families without Occupations ard

the Life-Cycle Approaches

Finally, Iet us examine the saving ratio of families without occupations. These family

groups consist of two different sub-groups; i,e., retired and unemployed families. The latter

sub-group is important in the analysis of saving ratios in underdeveloped countries. Their

incomes are generally low and saving ratios are negative. As unemployment increases in

economic recessions, the personal saving ratios may fluctuate violently in these countries.

Discussions of the saving ratios of retired families have been developed in the Western developed

countries, as a part of life-cycle theories. The weights of retired people in the developed coun-

tries are not negligible, and the large share of the group is considered a cause of decreasing

the average personal saving ratios in these countries. From this point of view, the recent

situation in Japan is interesting; i.e., the number of unemployed families is negligible but the

weight of the retired families is also small, though not negligible. Table 22 shows that the

weight of families without occupations is much lower than in the Western developed countries.

This fact can be explained as follows: (1) the rate of unemployment of young families is

10w in recent years in Japan, (9-) the percentage of aged families is lower than in the Western

developed countries, (3) aged persons find new employment with a lower wage rate or salary

after retiring from their main jobs, (4) some aged persons live together with their sons and

such families are classified by the occupations of their sons. As for (1), there are few objec-

tions among Japanese economists. Therefore, the life cycle analysis for the factors from (2)

36

TABLE 22. WEIGHT

HITOTSUBASHI JOURNAL OF EcoNoMlcs

OF FAMILIES WITHOUT OCCUPATIONS IN TOTAL FAMILIES

[ June

Note: l. This tab]e is made by using the sample distribution in the surveys in the whole country.

to (4) will be the main topics in this sectlon. The analysis of factor (2) in particular has ,a

special meaning in Japan, because some papers have asserted that this factor is a cause of

the higher saving ratios in Japan. There are two sorts of statistical materials for our purpose; i.e., data for families without

occupations and head-of-household age-group figures, whose lists are shown in Table 23. A

TABI_E 23. LISTS OF SURVEYS OF SAVING RATIOS OF FAMILIES ¥vITI{OUT OCCUPATIONS AND OF AGE GROUPS OF FAMILY HEADS

Country Sample Size Type of Survey Scope of Survey

Families witbout Occupations

Belgium 1961

India 19(X)

Japan 1959-

Netherlands 1950

Ryukyu 1961-

United Kingdom 1950-'56

United States 1950, 1960

FB (BS)

S (WBS) S (WBS) FB (WBS) FB (BS)

S (WBS) FB (BS)

R. in the whole country

WF and R. in the urban area

WF in the whole country

R. in the whole country

WF in the whole country

R. in the urban area

WF and R in the whole country

Age Groups of Family Heads

Japan 1959-

Sweden 1957, 1958

United Kingdom 1950-'or6

United S*tates, 1950, 1960

S (WBS) S (WBS) S (WBS) FB (BS)

NF in the whole country

A in the whole country

NF in the whole country

NF in the whole country

Note I the symbols m the "type of survey" column are defined in Table 13. 2. the letters in the "scope of survey" column are as follows: R.; retired fami]ies, WF; families without oc-

cupatlons, A; all families, NF; non-farm families.

comparison of saving ratios in the families without occupations indicates that the ratios is

much higher in Japan than in the other countries. Consistent results can be found in the

life cycle changes of saving ratios in Japan. As is shown in Figure 5, (A), the saving ratios

show an upward trend in the young and middle ages as the age of the household heads in-

creases, but the ratios begin to decrease after 50 years old in the Western developed countries.

INTERNATIONAL COMPARISON OF SAVING RATIOS BY OCCUPATIONAL GROUPS (ID 37 1967]

TABLE 24. COMPARISON OF SAVING RATIOS OF FAMILIES WITHOUT OCCUPATIONS

Note: 1, a) excluding the increase of cash, b) including depreciation of private house and

of consumer durables.

But the life-cycle pattern of saving ratios shows a rather peculiar form in Japan. That is,

the saving ratios are very high even in aged families. This fact was first pointed out by Mr.

Kanamori.19 He explained this as a result of the special system of wages and salaries in

FIG. 5. LIFE-CYCLE CFIANGES OF SAVING RATIOS AND RELATIVE INCOME

(A) Saving Ratios (B) Relative Income (%) 34

32

30

28

26

24

22

20

18

16

14

12

10

8 6

4

2 O

.~ -2 ~; eE: -4

bO~ .F -~ ~ ~ -8 uQ

- O

s ~ ~,,,

/'¥

/~ '¥

/~v ~ '//~-e /~>/S"/ ~1 ~ ~~:-

v _ ¥,./ ¥ /¥ _- -'

p -- V r/ 1! '?rl~/~ +'+ / ~l fr

~ .-// l'¥' (f// /~i ' '¥" '-)~ '~¥

~l fl !l

'I /

**:¥. ¥,'¥

¥¥

140 (%

130

120

l 10

g, ~ o* 100 ,~ 4) uD ~ 90 ~ ? < ~ 80 " ~ o ~ E: - 70 f~ F,

e * (:) 60

~ o ~ 50 0~ L

~

//'i ,, y~./. '

-7rl //' 'l

/<~)~j/ / / /

jit

ji Ahr::~t,

l '/j ¥¥¥<¥( ! . ~ '~ ~

i'¥ ! //1 ¥t ' j~'¥il)If-'~ j '11

.. ~ *- lc"">" y.'/ 'ilndra ¥.¥t

' .(It!~c2LJ ¥~

;'/' f ~~ /~~~

/ /

20 25 30 35 40 45 50 55 60 65 70 20 25 30 35 40 45 50 55 60 65 70 Age of Family Head Age Qf Family Head

Note: l. The relative incomes are defined as the ratios of the per

capita incomes of each head･of-household age group to total per capita income.

19 Kanamori, Hisao, "Why the saving ratios in Japan are too high ?" Monthly Review of the Planning Agency (in Japanese), 1961.

Economic

38 HITOTSUBASHI JOURNAL OF ECONOMICS [June Japan;20 i.e., Japanese workers are guaranteed by this system to increase their income as they

become older. The latter assertions should, however, be carefully re-examined because the

relative income changes among head-of-household age groups, are similar among the countries

as is shown in Figure 5, (B). In order to propose another assumption, it is useful to decompose the saving ratios of

aged families in Japan. The figures in Table 25 tell us that investments in their own houses

TABLE 25. SAVlNG RATIOS BY THElR COMPONENTS OF AGED FAMILIES IN JAPAN

and in stocks or bonds are relatively large in aged families in Japan. The same tendency

can also be found m the families without occupations in Japan, and is considered a distinguish-

ing characteristic, compared with the saving behavior in the 'other countries. The writer

thinks that the retirement fund system in Japan is the main cause of this tendency. Though

the retirement pension fund system has been developing in recent years in Japan, most retire-

ment money is usually paid at the time of retirement. As this amount of money is relatively

large in comparison with their usual money income, most retired people tend to save it for

future living expenses. As residence conditions are especialy inadequate, as was pointed out

in Section II, many retired people tend to invest it in their own houses.

The above finding could support the view that the higher saving ratios of families without

occupations is also a supplemental factor in increasing the total personal saving ratio in Japan.

In addition, the lower percentage of aged families should be examined. As was discussed in

the begining of this section, the aged groups tend to work in their second jobs and this

phenomenon would be related to the incompleteness of the social security system in Japan.

Most persons of these groups lost their assets in the Second World War and the violent in-

flation after the war, and the pension fund system does not provide enough to maintain their

living expenses, even if they received some amounts of retirement money.21 In fact, the lower

income classes in Japanese family budget surveys consist mainly of young workers and old

workers. Further, we should examine factor (4), mentioned in the begining of this section.

l'es but this In pre-war Japan, the aged people used to be included in the eldest sons' fami I ,

custom has been rapidly vanishing since the end of the war. However, this custom cannot be said to be negligible even in the 1900's. In fact, when we compare the men's distribution

by ages in the population statistics on individual bases with the numbers of family budget

statistics on family bases, the shares of families with aged family heads are rather lower in

20 wages in Japan generally increase as the years of work are longer, even if the sort of work does

not change. This system is called the wage system by order of age in Japan. 21 The description in the main sentence does not necessarily mean that old people cannot maintain their

minimum standard of living. As the growth rate of personal income in post-war Japan has been very hrgh the consumptlon patterns have changed remarkably. In order to follow these changes, the amounts

of stocks of savings or pension funds are not sufficient for old people.

1967] INTERNATIONAL COMPARISON OF SAVlNG RATIOS BY OCCUPATIONAL GROUPS (n) 39

Japan in comparison with the corresponding results in the United States. Since the incomes

of aged persons who live together with their sons are considered to be low, this remaining

custom may have a , positive effect in increasing the saving ratios. But this effect may be

small in recent years in Japan.

V. Final Remarks

The international comparisons shown in the first part of this paper as well as in the

second part, made clear some distinguishing characteristics in Japanese saving behaviour.

First, the saving ratios of the workers' families are higher in Japan than in the Western de-

veloped countries. This higher saving ratio may be explained mainly by the higher growth

rate of real wages in Japan. In addition to the increase of real income of workers' families,

the increase of bonus vers, to total-income-ratios should also be mentioned. That is, Japanese

workers and salaried employees receive their bonus payments, at least twice a year and this

share in total income has been increasing since 1951. The relationship between the increase

of bonus payments and the rise of saving ratios should be examined in detail in another paper

in the future. But it appears certain to the writer that the relatively higher rates of growth

of bonus payrnents accelerated the rise of saving ratios in Japanese workers' families. The

higher saving ratios of non-farm self-employed families should be mentioned, but the saving

ratios of farm families are not too high. The latter fact negates the assertion that the higher

personal saving ratios in Japan can be explained by the lower percentage of wage-type in-

come in total personal income.

Another distinguishing characteristic, which has not been pointed out by Japanese econo-

mists, is that the liquid-type saving ratios of workers' families as well as of non-farm self-

employed families are higher than in the other countries and these differences can explain

those in the total personal savlng ratios. This characteristic, the writer believes, may be the

key to explain the higher personal saving ratios in Japan. Some tentative assertions have

been proposed in this paper; that is, the scarcity of liquid-type capital, compared with the

high growth rate of the Japanese economy, have induced the higher desired levels of saving-

stocks-income ratios in these two groups. But more detailed analyses would be required in

order to open the door for the secret room of the surprisingly high saving ratios in Japan.

The effects of special life cycle patterns on the saving ratios have also been examined.

These results are interesting because of the peculiarities of the life cycle pattern. But this

effect would remain only as a supplemental factor in explaining the highar saving ratio. There

are other assumptions to explain the fact. According to Komiya's review,22 these assumptions

are classified into 8 groups. The main part of these groups has been partially checked in

this paper, by making international comparisons. But there remain some assumptions. The main assumptions which have not been examined in this paper are as follows. (1) The

income distribution in Japan is more unequal than in the Western developed countries, and

this inequality induces the higher personal saving ratios in Japan, (2) the weight of property

incomes in total income is large in Japan, (3) Japanese people have a custom to save more,

Among these assumptions, we cannot check (3) numerically. As for (1) and (2), Komiya

22 Komiya. R.. Post-War Japa'lese Economic Growth, op. c~t

40 HITOTSUBASHI JOURNAL OF ECONOMICS

gives negative

results, though

suggestions.

a more rigid

The writer's preliminary examination is consistent with

assertion must be postponed until future examinations.

Komiya's

Reference Data (for (II) part only)

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Finland: Socialisa Erikostkimuksia. Rural Consutnption Investl~ation, 1959-1960, 1962.

India: National Council of Applied Economic Research. Urban Income and Saving, 1962. National Council of Applied Economic Research, All India Rural Household Econo'nic Surve:y,

1965.

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