Precautionary Savings and Single Women in Japan

Wataru Kureishi, National Institute of Population and Social Security Research, Japan
Midori Wakabayashi, Osaka Prefecture University

Using Japanese panel data, we analyze precautionary wealth due to staying single in the presence of income uncertainty. Our cross-sectional and panel analyses, in which the dependent variable is target wealth, find that young women who get married within three years have 0.62-1.58 million yen less target wealth for precautionary purposes, as well as 1.02-1.53 million yen less target wealth for retirement when the coefficients of these variables are significant. These results suggest that in facing higher risk of income fluctuation due to choosing to marry late or remain unmarried, young women tend to save more to mitigate the income risk inherent in single life.