My background is as an applied economist with interests in monetary policy, financial economics, and applied econometrics. However, I have recently developed an interest in the increasingly popular area of household finance. As its name suggests, this field in concerned with investigating the determinants of financial decision-making at the household level. To address empirical research questions, researchers commonly exploit information contained in large-scale household surveys or questionnaires. In addition to reporting how individual households allocate their financial assets and wealth, such surveys typically provide detailed information relating to household members’ employment status, health, and income, as well as more basic information relating to personal characteristics such as age, gender, and marital status.
The work that I conducted during my visit to the Institute of Economic Research (IER) centred around the relationship between savings behaviour and health at the individual household level in Japan. The research – which is being undertaken with co-researchers at the University of Sheffield, UK, and Curtin University, Australia – has in part been facilitated by the increasing availability of household level survey data in Japan. As the IER’s Takashi Unayama has stressed (Unayama, 2018), recent years have witnessed a growing dependency on household surveys by academic researchers and Japanese policymakers. My joint work adds to the increasing body of academic work that exploits the rich information contained in such surveys. Specifically, we investigate how self-reported mental and physical health affects saving decisions by Japanese households.
Although it is not uncommon to find contributions in the academic literature in which poor physical health induces higher levels of safe asset holding such as precautionary savings, no previous work has been undertaken in which the impact of mental health on savings behaviour is systematically explored using Japanese household-level data. Significantly, our research indicates that poor mental health has a large, detrimental impact on the amount of savings held by Japanese households. This finding also holds when one considers the impact of mental health on the size of a household’s total financial portfolio, which includes savings plus other risky financial assets (such as shares). These findings, we suggest, may have ultimately have significant public policy implications: although mental health problems are comparatively lower in Japan than other high-income countries, so too are treatment and employment rates for individuals with mental health problems (Kasai et al. 2017).
Of course, it is not possible to discuss the above project without mention of my host institution. The IER at Hitotsubashi University is an excellent place to conduct research, and my own research has benefitted greatly from the comments and suggestions of a number of faculty members. This is not unsurprising. A sizable group of IER researchers have amassed considerable experience and expertise in analysing Japanese household-level and micro-data. For instance, Professor Yukinobu Kitamura has previously conducted important joint research into the characteristics of household saving behaviour in Japan (Kitamura and Takayama, 1994; Kitamura, Takayama, and Arita, 2001). Other IER faculty members have used household level data to explore the wider determinants of portfolio allocation, as well as conducting research into areas related to education and health. The Research Centre for Information and Statistics of Social Science (RCISS), which is attached to the IER, also forms strong foundation from which research using Japanese micro-data can be supported.
Finally, I would like to give my heartfelt thanks to all the faculty and support staff at the IER and the CEI who made me feel so welcome during my stay. Being based at the IER has helped my project to gain considerable momentum, and made a number of new research collaborations with IER staff members possible. I owe a special debt of gratitude to Professor Yukinobu Kitamura for supporting my visit and providing me with a number of opportunities to present my research findings to different audiences. I very much look forward to maintaining a productive and engaging relationship with the IER in the coming years.
References
Kasai, K., S. Ando, A. Kanehara, Y. Kumakura, S. Kondo, M. Fukuda, N. Kawakami, and T. Higuchi (2017). Strengthening community mental health services in Japan. The Lancet - Psychiatry 4(4), 268-270.
Kitamura, Y. and N. Takayama (1994). Household saving behavior in Japan. In J. M. Poterba (Ed.), International Comparisons of Household Saving, pp. 125-168. National Bureau of Economic Research (NBER).
Kitamura, Y., N. Takayama, and F. Arita (2001). Household savings in Japan revisited. Research in Economics 55(2), 135-153.
Unayama, T. (2018). Introduction to Japanese Household Surveys. Springer Briefs in Economics. Springer.