Economics & Finance / Finance & Investment / Personal Finance & Savings

Demographic Structure and Total Household Savings in Japan, China, and India

Demographic Structure and Total Household Savings in Japan, China, and India This research report explores how changes in demographic structure affect the evolution of household saving rates in three major economies: Japan, China, and India. By constructing a life-cycle model, the authors quantify the contribution of different age-group distributions to national saving behavior, highlighting the distinct impacts of shrinking household size versus population aging. The findings show that the decline in Japan’s savings rate is mainly due to the surge in retirees, while rising savings rates in China and India stem from reduced burdens of supporting children and expectations of diminished future old-age support. The paper not only explains the divergent saving trends of recent decades but also predicts that as aging spreads across Asia, household saving rates in Japan and China will face downward pressure in the future.