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Abstract

Vol. 56, No. 3, pp. 234-247 (2005)

“The Bonus System and the Household Saving Rate -Evidence from Japanese Household Data-”
Satoshi Shimizutani (The Institute of Economic Research, Hitotsubashi University), Masahiro Hori (Cabinet Office, Government of Japan)

A number of hypotheses have been proposed to examine why Japan's household saving rate was high. This paper takes advantage of a micro-level data from Public Opinion Survey on Household Financial Assets and Liabilities to reexamine the effects of the bonus system on households' savings. We find the average saving rate of households with bonus payments is significantly higher than that of households not receiving a bonus, after controlling for several factors that might affect saving patterns. However, this observation reflects the fact that households with negative saving rate are unevenly clustered on the non-bonus group. The positive effect of bonus payments on household saving rate disappears once the sample is divided into households with positive and those with negative saving rate.