ESRI Discussion Paper Series No.284
Intergenerational Transfers and Asset Inequality in Japan:
Empirical Evidence from New Survey Data

Junya Hamaaki
Research Officer, Economic and Social Research Institute
Masahiro Hori
Visiting Research Fellow, Economic and Social Research Institute
Professor, Institute of Economic Research, Hitotsubashi University
Keiko Murata
Visiting Research Fellow, Economic and Social Research Institute
Professor, Graduate School of Social Sciences, Tokyo Metropolitan University

Abstract

This paper tries to quantitatively examine the impact of intergenerational transfers on asset inequality among Japanese households. For that purpose, we estimate an intergenerational asset transfer function with various control variables, using a unique micro dataset taken from the "Household Survey on Family Relationships, Employment, Retirement Payments, and Intergenerational Transfers of Assets and Education," conducted by the Economic and Social Research Institute, Cabinet Office, Government of Japan. Employing three different models - a Tobit model, an interval regression model, and an ordered probit model - to ensure that our results are independent of the specific econometric approach used, we examine whether asset transfers received are correlated with households' financial strength. We find that higher income households are likely to receive larger asset transfers. However, the contribution of intergenerational transfers to asset inequality appears to be quantitatively limited when measuring financial strength in terms of households' life cycle wealth.


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  2. Abstract
  3. page2
    1. Introduction
  4. page4
    2. Data description
    1. page4
      2.1 Data source
    2. page5
      2.2 Descriptive statistics
  5. page8
    3. Empirical analysis
    1. page8
      3.1 Econometric approach
    2. page10
      3.2 Specification of the models
  6. page12
    4. Results
    1. page13
      4.1 Determinants of the amount of intergenerational asset transfers
    2. page15
      4.2 The relationship between asset transfers and household financial strength
  7. page16
    5. The quantitative importance of intergenerational transfers
    1. page17
      5.1 Household characteristics and the probability of receiving intergenerational transfers
    2. page18
      5.2 Household characteristics and the amount of asset transfers
    3. page19
      5.3 The impact of intergenerational transfers on asset inequality
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    6. Conclusion
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    References
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    Table 1. Distribution of intergenerational asset transfers
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    Table 2. Descriptive statistics
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    Table 3. Estimation results of the intergenerational asset transfer function
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    Table 4. Estimation results of the correlation with labor earnings and life cycle wealth
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    Table 5. Expected probability of receiving intergenerational transfers, by household characteristic
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    Table 6. Expected amount of intergenerational transfers, by household characteristic (Unit: million yen)
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    Table 7. Expected amount of intergenerational transfers, by households' financial strength
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    Appendix A. Determinants of the probability of receiving intergenerational transfers
  18. page32
    Appendix Table A. Marginal effects in the ordered probit model
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