The effect of pension reform on pension-benefit expectations and savings decisions in Japan

Using the Japanese Study of Aging and Retirement (JSTAR), a Japanese panel survey of people age 50 or older, we find that many Japanese in their early 50s—compared to those in their late 50s and early 60s—expect their level of public pension benefits to decline. We find that recent pension reform (which raised the pensionable age) affected people by increasing the age when they expect to claim their benefits by almost the exact amount for all. Nevertheless, the effect of reform on their expectations for future benefits remained insignificant. We also find evidence that anxiety about the public pension program's future induces people to save more.