Are the elderly a cost factor for society or its safety net? A comparison of family regimes and National Transfer Accounts data in Germany and Japan

Various works have argued that ageing societies’ increasing dependency ratios provoke generational conflict over scarce financial resources. In post-industrial economies, younger cohorts face disadvantages in the labour market and regarding the generosity of the welfare state compared to previous generations. However, there has also been the tendency to alleviate these imbalances through informal inter-generational family transfers. Comparing Japan and Germany – two of the fastest aging societies worldwide – this presentation investigates whether and to what extent the family can serve as a bulwark against potential generational conflict. The paper draws on Brumberg and Modigliani’s (1954) lifecycle model and Mudrazija’s (2014) extension and combines a generational perspective with comparative welfare regime research. For hypothesis testing, the two most recent cross sections of National Transfer Accounts (2004/2009 for Japan, 2003/2008 for Germany) are used.

I will investigate whether the elderly serve as a safety net for precarious younger generations in both countries. Results indicate that income deficits over the lifecycle have increased. In addition, I will look at whether individual assets such as savings have become more important. With regard to demographic and household-financial dynamics and policy responses, the presentation will compare differences in the capacity of families to serve as an inter-generational safety net.

Felix Lill is a journalist reporting on Japan and East Asia (for Die Zeit, NZZ, Die Presse, Der Spiegel, Cicero and others) and a PhD candidate in public policy at the Hertie School of Governance in Berlin. In his dissertation, he is researching if and under what conditions population ageing coincides with generational conflict. Felix Lill is currently a scholarship holder of the German Institute for Japanese Studies, Tokyo.