J Fam Econ Iss

DOI 10.1007/s10834-014-9390-7

ORIGINAL PAPER

The Relationship Between Life Satisfaction Among Wives

and Financial Preparedness of Households in Japan
Yoko Mimura

Springer Science+Business Media New York 2014

Abstract The wealth gap between the rich and poor is

widening and contributing to Japans shrinking middle class.
This study examined concerns about the future and life satisfaction and their association with household financial
preparedness (e.g., savings, investments, life insurance)
among married women in Japan. Double-hurdle models
assessed the probability of having savings and the amount of
these savings, using the sample from the 2006 Japanese
Panel Survey of Consumers (n = 1,206). Supporting earlier
works from several other countries, concerns about the future
were positively associated with the probability of having
supplemental life insurance. Moreover, life satisfaction
levels were positively associated with the probabilities of
having savings, investments, and supplemental life insurance and with the amount of the investments. The findings
suggest economic inequalities among women could widen in
the future, as those who have and are expecting to have more
financial resources are more likely to be prepared for future
financial needs than those who do not.
Keywords Investments
Japan
Life insurance
premium
Life satisfaction
Married women

Pessimism
Savings

Introduction
Income inequality is a social concern in Japan, indicated by
its ranking among the top several OECD countries in terms

Y. Mimura (&)
Department of Family and Consumer Sciences, College of
Health and Human Development, California State University
Northridge, Northridge, CA 91330-8308, USA
e-mail: yoko.mimura@csun.edu

of relative poverty. Specifically in the mid-2000s, 15.7 %

of individuals in Japan lived in poverty, which has
increased since the 1980s (OECD 2011). A higher relative
poverty rate often correlates with greater income inequality. Along with other OECD countries, Japan experienced
an increase in income inequality over the latter part of the
20th century, with Gini coefficients constantly higher than
the OECD average (OECD 2008). These figures, related to
the financial wellbeing of individuals and families, spill
over into other areas of wellbeing. Higher perceptions of
income inequality were associated with worsening health
conditions and increasing rates of dissatisfaction (Oshio
and Kobayashi 2010). Income inequality relates to economic inequality, spreading the effects of being disadvantaged into various areas such as health (Ichida et al.
2009), subjective wellbeing (Oshio and Urakawa 2013),
childrens educational attainment (Abe 2010), and retirement preparation (Yamada and Higo 2011).
Saving is an inter-temporal choice between current and
future consumptions and is largely cued by different
institutional and mental frames (Akerlof and Shiller 2009,
p. 123). This paper focuses on the mental frames, reflected
in the pessimism toward the social and economic situations
of the nation and personal life satisfaction, as pessimism
and life satisfaction may be influenced by the institutional
setting at the point of survey. In Japan, while the household
savings rate was considered high at one point (Anderson
1990), this is no longer the case. Latter 20th century
household savings rates peaked in the mid-1970s, followed
by a decline for a few decades, except for a few incidents
of slight increases in the savings rates during the economic
recession of the 1990s (Koga 2006; Okada and Kamata
2004). Despite savings rate increases during the recession,
some societal groups did not actually save more. Among
younger households, the increase in financial reserves was

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J Fam Econ Iss

due to uncertainties about the future (Murata 2003). Even

when the national economic indicators showed growth,
some individuals saw a darker future than others did. At the
same time, there were some households with no savings or
investments for the future (Institute for Research on
Household Economics 2003).
Specifically, in recent years, about a quarter of the
households in Japan had no savings. About 29 % of
households headed by individuals in their 20 s had no
savings, and about 20 % of households headed by those in
their 60 s had no savings. The lower the income group, the
more likely it was not to have savings. Among households
with incomes below 3,000,000, 37 % had no savings,
while among those with incomes over 12,000,000, only
6 % had no savings (Bank of Japan 2009). The threshold
for the low income category, 3,000,000, is equivalent to
approximately US $25,641 using the exchange rate when
the data were collected.1 The higher income category (over
12,000,000) is equivalent to over US $102,564. Research
points to the aging of the population as the cause for the
decline in household savings rates (Koga 2006; Nakata
2009; Shindo 2006).
While the percentage of households with investment
assets is much lower than in the United States (Yoshida
et al. 2002), investment in the stock market gained popularity in Japan over the past decade, with more households
allocating their financial assets both in savings accounts
and in financial investments (Tsunoda 2007). Finally,
financial preparation through the purchase of life insurance
plans is common among Japanese households. In a
nationally representative survey of households, 90.5 % had
life insurance for at least one household member, a figure
matching the households included in this study, and the
annual expenditure averaged 416,000 (US $ 3,556) in
2012 (Life insurance culture center Life insurance culture
center 2012).
In this paper, financial preparedness is measured through
savings, investment in the stock market and mutual funds,
and payment for supplemental life insurance plans. There
are several reasons for this. First, cash saved in a bank
account or at another financial institution assures financial
availability at a later time. Second, investment in the stock
market and in mutual funds may give greater return than
money kept in secured savings accounts. Finally, purchasing a life insurance plan that adequately covers
financial needs beyond other forms of financial preparations, in the case of an unexpected loss, provides financial
security for many individuals and families.
1

In this paper, the exchange rate referred to is 117 Japanese yen for a
US dollar, the rate in September 2006 when the data for this study
were collected. The range has been between 84 yen for a dollar
(August 16, 2010) to 134 yen for a dollar (February 2002) between
2000 and 2010 (St. Louis Federal Reserve Bank).

123

Motivated by the wealth gap between the rich and poor

and the lasting impact of family background on the economic well-being among individuals in Japan, I examined
how concerns about the future of the society and economy
and life satisfaction levels among married women in Japan
relate to their household financial preparedness. One reason
married couple households of working age are worthy of
focus is the national demographic composition: Japan is
among the aging societies with decreasing fertility rates.
Married couple households of working age cite lack of
financial resources as the primary reason for not having a
child or an additional child (Moriizumi 2005; Yamada
2007). There has been an increase in non-standard
employment in the past few decades, and only a portion of
married male workers in Japan experience lifetime
employment that provides stable income (Ono 2010),
which may cause more women to seek employment,
although the majority of such employment is often not
permanent. Wives play various roles in household finances,
and this study focuses on the psychological aspects of these
women to add to the literature on household savings
behaviors using micro-level data.
Overall, the pessimism about the future society and
economy was not an important predictor of the financial
preparedness among married women being studied. It was
positively associated only with the probability of having
had expenditures on supplemental life insurance. The
subjective score of life satisfaction, on the other hand,
explained the probability of having savings, investments,
and expenditures on supplemental life insurance. The
higher the life satisfaction measures, the more likely these
womens households were to have had such means of
financial preparations. Among control variables, indirect
measures of social strata, such as having a college education, expecting an inheritance, having fewer children, and
owning a home were positively associated with the probability or the amount in one or more of these three financial
preparedness measures.
Theory and Previous Research on Determinants
of Financial Preparedness
The theoretical framework of this study comes from the
family resource management model proposed by Deacon
and Firebaugh (1988) shown in Fig. 1. The current situation of society and the economy are the external inputs,
which affects the internal inputs. The internal inputs in this
study are the outlook about society and the economy that
respondents reported, the life satisfaction of the respondents, and other control variables. The input goes through
throughput, resulting in observable output. The output in
this study is the savings behavior. The feedback from the
output to the external input may be aggregate household

J Fam Econ Iss

Fig. 1 Family Resource
Management Model (Deacon
and Firebaugh 1988) Based on
Deacon & Firebaugh (1988),
Figure. 2.3 Family system,
p. 24. Items in rectangular are
authors addition

saving data that is reported in the news, which informs

individual perceptions about where the country and their
households stand in terms of financial preparation for the
future. The feedback may also be the household responses
to previous years savings, spending, and earning behaviors. Among various theories on household savings, this
particular theory possesses individual-capability, social
strata, and also institutional view approaches.
The following is a brief literature review on the determinants of financial preparedness as it relates to the focuses
of this study, such as pessimism about the future society
and economy and life satisfaction among women. After a
review of related studies on the association between
financial wellbeing and pessimism or optimism, studies
from various countries about financial wellbeing and life
satisfaction are summarized. Additionally, a general review
of household characteristics on financial preparedness will
be discussed.
Pessimism is positively associated with an increased
financial preparedness (Bleichrodt and Eeckhoudt 2005;
Lusardi 1998; Souleles 2004). While consumers do not
accurately assess the future macroeconomic environment
(Souleles 2004) or future household income fluctuations
(Lusardi 1998), nevertheless, consumer confidence is
associated with an increase in expenditures in Japan (Kwan
and Cotsomitis 2007), Canada (Kwan and Cotsomitis
2006), the UK (Daron and Scott 1994), and nine EU
zerkek and C
countries (O
elik 2009), while another study
found mixed results regarding EU countries (Cotsomitis
and Kwan 2006). In the US, optimism was associated with
a greater debt burden (Hanna et al. 2012). No association
between the future outlook and financial preparedness was
observed in Hong Kong (Fan and Wong 1998). In terms of
investments, among middle-aged male company employees in Japan, investments in the financial market were
explained by household income, total assets, knowledge

about the financial market, and psychological factors, such

as an expected return on investments and the anticipated
cost of investing (Kitamura and Nakajima 2010).
Literature suggests that life satisfaction is positively
associated with an increased financial preparedness.
Although an increase in individual and household income
may not make individuals happier (Frey and Stutzer 2002),
asset accumulation was positively associated with life
satisfaction levels among older adults in Korea (Han and
Hong 2011) and among middle age adults in the US
(Johnson and Krueger 2006). Similarly, financial satisfaction (Joo 2008) and financial status (Gerrans et al. 2013)
were positively associated with personal wellbeing. Among
married women in Japan, a higher household income,
rather than a higher personal income, was associated with
greater marital happiness (Lee and Ono 2008), which may
improve their general life satisfaction. There is further
evidence that married women are happier concentrating on
household work than participating in the labor market
(Oshio et al. 2013).
Other factors that explain the variations in financial
preparedness are individual and household characteristics,
social strata such as class, and institutional support. Indeed,
a majority of existing studies on the determinants of
financial preparedness, such as savings and asset accumulation have focused primarily on the socio-economic
backgrounds of individuals and households (Fisher and
Hsu 2012). There are only a limited number of studies,
however, about savings in Japan at the micro level. For
instance, the motivation to save varies according to the age
of the householders and the life-cycle model applied in
Japan (Horioka and Watanabe 1997). Ones position in the
social strata places a young adult from a disadvantageous
background in Japan at further economic disadvantage
(Abe 2010). In a study of low-income households in the
US, institutional support explained the variations in asset

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J Fam Econ Iss

accumulation more than individual and household characteristics or social strata (Kwan and Cotsomitis 2007). In
another study of low-income households participating in an
Individual Development Account program, the household
income level did not explain asset accumulation (Sherraden
et al. 2003), nor homeownership status a decade after
receiving down payment assistance (Grinstein-Weiss et al.
2013).
In summary, both pessimism and life satisfaction
explain increased financial preparedness along with individual characteristics, social strata, and institutional support. The impact of pessimism or optimism on household
savings variations was studied in Hong Kong (Fan and
Wong 1998) and the US (Hanna et al. 2012), and empirical
studies support the association between life satisfaction and
savings in Korea (Han and Hong 2011) and the US
(Johnson and Krueger 2006). The current study adds to the
literature on the future outlook (optimism, pessimism) and
personal psychological factors (including satisfaction and
happiness) to the model to better understand the psychological determinants of savings utilizing data from Japan.

Methods
Data and Sample Selection
This is a cross-sectional study, where the data came from
the 2006 Japanese Panel Survey of Consumers, provided
by the Institute for Research on Household Economics in
Tokyo, Japan. Respondents to the survey were women aged
between 27 and 47, and those in the study sample for this
study were all married at the time of the 2006 survey
(Institute for Research on Household Economics 2007).
The respondents filled out a paper questionnaire. The 2006
survey was the newest available data at the time when the
data preparation and analysis for this study took place.
Only the observations with positive total household
incomes from the 2005 calendar year were included in the
study (n = 1,206).
Response Variables
A separate model was run for savings, investments, and
insurance. The response variables (all data collected during
the September 2006 interviews) were the presence of
household savings and their values, the presence of
investments and their values, and the presence of expenditures on supplemental life insurance and the amount
spent for such insurance during the past 12 months. Supplemental life insurance provides financial resources above
and beyond what the national social security program
offers deceased employees immediate family members.

123

These three amounts were measured as ratios to the

household income from 2005. Approximately 80 % of the
respondents had financial savings, about 12 % had financial investments, and about 91 % had paid for some sort of
supplemental life insurance. Survey items used to create
the insurance variable were those which asked whether or
not the respondent or the spouse had term and/or universal
life insurance.
Explanatory Variables
The explanatory variables were an index of the respondents concerns about the future of Japanese society and
the economy and an index of their levels of happiness and
life satisfaction. The former, which is referred to as the
pessimism measure, is a standardized measure of responses
to 17 survey items, which the respondents answered as
either agree or disagree. The second item, which is referred to as the life satisfaction measure, is a standardized
measure of responses to seven Likert-scale statements
regarding respondents satisfaction with their living standards, incomes, and spending patterns, and their perceptions of their own happiness, health, and physical
appearance. There is a similarity between this measure and
the resource adequacy perception in Hyun et al. (1993,
p. 222); the current study, however, does not include
marital satisfaction.
Control Variables
Control variables included the socio-economic characteristics of the respondents and households. The former were
age, education (having a college degree or not), employment status (employed or not), number of unexpected life
events experienced within a year (such as starting a new
job, mental health issues of self or family members),
expectation to receive an inheritance from the respondents
own parents (or not), and participation in a public pension
program (or not). Respondents who were not employed at
the time of the survey are referred to as homemakers or
housewives. The household characteristic variables were
age difference between the respondents and their husbands
(measured as how much older the husband was compared
to the respondent), number of children, homeownership
status, and rural residency (or not). Of these control variables, education, expectation to receive an inheritance, and
homeownership status may suggest married womens relative position within the social strata.
Analytical Methods
The analytical approach utilized to assess the probability of
having each of the financial resources and the amount of

J Fam Econ Iss

each was the double-hurdle models (Greene 1995). The

two-stage approach was necessary for this study because
not all households had savings, investments, or expenditures on supplemental life insurance. The double-hurdle
models simultaneously assessed the variations in pessimism or concerns for the future and life satisfaction
between those who had households or personal savings,
investments, or any expenditure for supplemental life
insurance premiums within the past 12 months and those
who did not. This first hurdle was assessed by probit
through the maximum likelihood method. Three separate
models were assessed for each of the financial savings
categories. Among those who had savings, investments, or
expenditures on supplemental life insurance, the model
assessed the determinants of the differences in the amount
of total savings, the amount of total financial investments,
or the insurance expenditures as a ratio to income. This
second hurdle of truncated regression was estimated
through the maximum likelihood method. Sigma is the
inverse of the Mills Ratio. Statistical analyses were conducted using SAS software, where the first hurdle was
estimated through PROC PROBIT and the second hurdle
was estimated through PROC GENMOD.

Results
Sample Characteristics
Descriptive statistics of the respondents are described in
Table 1. In sum, the psychological measures were different
between the three sets of two groups, those with and without
savings, investments, and supplemental life insurance
payments. Bivariate results indicate the higher the life satisfaction levels of married women, the more likely their
households had financial savings or investments. Also, the
more pessimistic these women were, the more likely their
households made payments for a supplemental life insurance policy.
Overall, the incidents of having savings, investments,
and supplemental life insurance were all positively correlated with each other. In all three financial preparedness
categories, household incomes were higher among those
with such values than those without. The mean savings
value among those with positive savings values was about
6,252,100 (about US $53,440). The mean investment
value among those with positive investments was about
4,784,500 (about US $40,890). The mean insurance
expenditure among those who made any payment for a
supplemental life insurance policy was 413,800 (about US
$3,540). In terms of these values relative to household
income, the median savings-to-income ratio for those with
savings was about a quarter (mean = 0.45). The median

investment-to-income ratio was one tenth (mean = 0.24).

Finally, the median life insurance payment-to-income ratio
was one fiftieth (mean = 0.04).
In terms of the pessimism measure, the difference is
observed only regarding insurance. Those with supplemental life insurance were more pessimistic about the
future society and economy than those without. There was
no difference in the pessimism measure between those with
or without savings and between those with or without
investments. Life satisfaction measures were different
between those with both savings and investments and those
without. The mean satisfaction score among those with
savings was higher than the score of those without. The
mean satisfaction score among those with investments was
also higher than the score of those without.
Multivariate Model Results
Table 2 shows the double-hurdle model results of the savings, investments, and expenditures for supplemental life
insurance among households with married women. Overall,
there was no association between the pessimism and the
probability or the amount of savings and investments. The
future outlook was associated with a higher probability of
having paid for supplemental life insurance. The higher the
pessimism measure was, the higher the probability of having paid for a supplemental life insurance policy, controlling for other explanatory and control variables. Satisfaction
with life was associated with variations in savings, investments, and supplemental life insurance. Married women
who were more satisfied with life were more likely to have
savings and investments, pay for supplemental life insurance and have more value in investments as portions of their
annual household incomes. It makes intuitive sense that
when one is financially prepared for the future, one is more
likely to be more satisfied with life.
Among covariates of characteristics of the respondents,
all but the number of life events experienced in recent
years and the participation in public pension program had
some association with one or more response variables.
Older women were more likely to have had the investments
and the expenditures for supplemental life insurance. They
also had more savings and investments relative to their
household incomes, given they had savings and investments, respectively. Those with college education were
more likely to have had savings and expenditures for life
insurance, and when they did, they were more likely to
have had more savings relative to their household incomes.
Among those households with positive values for each,
when wives were employed, the amounts saved, invested,
and spent for life insurance were lower relative to the
household incomes than when the wives were not
employed. Finally, households with wives who were

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J Fam Econ Iss

Table 1 Characteristics of
Respondents with and without
Savings, Investments, and
Payment for Supplemental Life
Insurance

Savings
Variables

Investments

Supplemental life
insurance expenditures

Yes

No

Yes

No

Yes

No

100

96.62

77.79**

82.89

51.40**

Financial measures
Have savings
Have investments

14.80

2.08**

100

0.00

13.10

3.74**

Have supplemental life

insurance

94.31

78.33**

97.30

90.26**

100.00

0.00

Household income [in

10,000]

1524.6
(798.04)

1120**
(601.13)

1843.2
(783.32)

1388.2**
(762.99)

1470.6
(783.3)

1171.3**
(686.69)

Savings (in 10,000)

625.21
(932.13)

0.00**
(0.00)
478.45
(947.68)

0.00**
(0.00)
41.38
(54.61)

0.00**
(0.00)

Investments (in 10,000)

Supplemental life
insurance (in 10,000)
Savings/income ratio

0.445
(1.203)

0.00**
(0.00)

Investment/income ratio

0.346
(0.174)

0.007*
(0.089)

0.236
(0.403)

0.00**
(0.00)

Insurance/income ratio

0.037
(0.173)

0.037
(0.148)

0.029
(0.031)

0.038
(0.170)

0.041
(0.176)

0.00*
(0.00)

Pessimism measure

0.168
(8.365)

-0.038
(7.970)

0.414
(7.590)

-0.054
(8.111)

0.188
(7.869)

-1.900*
(0.529)

Life satisfaction measure

0.582
(4.299)

-2.366**
(5.238)

1.468
(4.346)

-0.211**
(4.656)

0.124
(4.55)

-1.33 (5.44)

37.72
(6.02)

39.23
(6.12)

37.20**
(5.89)

37.59
(5.89)

36.01
(6.39)

Psychological measures

Characteristics of the respondents

Age
37.38
(5.93)

Notes These numbers are

percent columns for categorical
variables and means (standard
deviations) for continuous
variables. The significance of
groups are based on Chi square
tests for the categorical
variables and those based on
t-tests for continuous variables,
and they are noted on the first
row of No columns for each
of the savings, investments, and
insurance

p \ 0.10, * \ 0.05,
** \ 0.01

Have college education

42.24

19.58**

58.11

34.88**

38.85

26.17**

Employed

58.49

61.67

60.81

58.88

59.14

58.88

Number of events
experienced

1.107
(0.412)

1.138
(0.503)

1.135
(0.398)

1.110
(0.436)

1.11
(0.43)

1.10 (0.45)

Expect inheritance

30.64

15.00**

42.57

25.43**

28.12

21.50

Participate in public
pension program

92.96

88.33*

94.59

91.68

92.45

87.85

Age gap with husband

2.25
(3.64)

2.64
(4.18)

2.851
(3.793)

2.256
(3.743)

2.33
(3.73)

2.36 (3.95)

Number of children

1.707
(0.979)

2.129**
(1.080)

1.561
(0.971)

1.823**
(1.005)

1.80
(0.98)

1.71 (1.21)

Own home
Live in rural area

72.67
9.52

63.75**
7.92

74.32
6.76

70.42
9.55

72.70
9.46

52.34**
6.54

966

240

148

1,058

1,099

107

Household characteristics

expecting inheritances were more likely to have had savings and investments.
All the covariates related to household characteristics
had some association with one or more response variables.
The greater the age gap between the wife and the husband,
and the older the husband was compared to the wife, the
probability that the household had investments was higher

123

than when the age gap was smaller. Having fewer children
was associated with a higher probability of having savings
and investments. Further, among those with the investments, the amount in investments was higher relative to the
household income when the household had fewer children.
Being a homeowner was associated with a higher probability of having paid for supplemental life insurance within

J Fam Econ Iss

Table 2 Double-hurdle Model
Results of Savings, Investments,
and Expenditures on
Supplemental Life Insurance as
a Percentage of Annual
Household Incomes

Savings
Variables

Investment

Supplemental life
insurance expenditures

Probit

Truncated
Regression

Probit

Truncated
Regression

Probit

Truncated
Regression

0.006
(0.006)
0.065**
(0.010)

0.003
(0.005)
0.014
(0.009)

0.005
(0.006)
0.040**
(0.012)

0.000
(0.004)
0.016*
(0.008)

0.018**
(0.007)
0.035**
(0.12)

-0.000
(0.001)
0.000
(0.001)

0.008
(0.008)
0.485**
(0.100)

0.014*
(0.007)
0.253**
(0.081)

0.048**
(0.009)
0.442
(0.103)

0.024*
(0.006)
-0.006
(0.068)

0.018
(0.010)
0.294*
(0.120)

-0.000
(0.001)
0.009
(0.011)

Employed

-0.082
(0.094)

-0.250**
(0.082)

-0.016
(0.105)

-0.139*
(0.068)

-0.064
(0.112)

-0.024*
(0.011)

Number of events
experienced
Expect inheritance

-0.093
(0.098)
0.349**
(0.111)

-0.034
(0.095)
-0.007
(0.085)

0.134
(0.111)
0.301**
(0.105)

0.001
(0.088)
0.073
(0.065)

0.071
(0.127)
0.025
(0.127)

-0.009
(0.012)
-0.019
(0.012)

Participate in public
pension program

0.271
(0.151)

0.008
(0.154)

0.288
(0.176)

0.007
(0.020)

-0.006
(0.012)

-0.004
(0.011)

0.035**
(0.013)

0.003
(0.009)

-0.001
(0.014)

-0.001
(0.001)

Number of children

-0.226**
(0.048)

-0.027
(0.044)

-0.200**
(0.056)

-0.100**
(0.037)

0.009
(0.056)

0.010
(0.006)

Own home

0.370
(0.102)
0.052
(0.158)

0.041
(0.097)
0.0399**
(0.132)

0.049
(0.121)

0.057
(0.084)

0.412**
(0.118)
0.080
(0.200)

0.008
(0.013)
0.040
(0.018)

Psychological aspects
Pessimism measure
Life satisfaction
measure
Characteristics of the
respondents
Age
Have college
education

Household
characteristics
Age gap with
husband

Note These numbers are

parameter estimates and
standard errors. The truncated
regression model for savings
excludes 20 observations that
reported having savings but did
not report the value of the
savings

\ 0.10, *p \ 0.05,
**p \ 0.01

Live in rural area

Sigma

1.190
(0.027)

0.369
(0.022)

0.195
(0.004)

Log likelihood ratio

-532.05

-1508.64

-402.52

-59.61

-337.22

358.56

1,206

947

1,206

141

1,206

1,099

the past 12 months. Finally, among those households with

savings, those who lived in rural areas had more savings
relative to their household incomes than those who lived in
urban areas.

Conclusion and Discussion

This paper examined how pessimism, reflected in the
degrees of concern about the future of the society and
economy, and life satisfaction relate to financial preparedness among married women in Japan. The finding
partially confirms the existing theory (Bleichrodt and Eeckhoudt 2005) and empirical studies (Hanna et al. 2012;
Lusardi 1998; Souleles 2004) on the positive impact of
pessimism on savings: Married women who were

pessimistic were more likely to purchase supplemental life

insurance. Further, this study confirmed the existing literature on the positive association between life satisfaction
and financial preparedness (Han and Hong 2011; Johnson
and Krueger 2006).
Overall, being more satisfied with life, not working,
expecting an inheritance, and having fewer children were
positively related to financial preparedness through savings
and investments among married women in Japan, relative
to their household incomes. Based on the family resource
management model (Deacon and Firebaugh 1988), I argue
that being more satisfied with life results in wives implementing improved personal and managerial systems that
promote more effective financial management, which in
turn results in higher savings and investment probabilities
and higher amounts of investments relative to household

123

J Fam Econ Iss

income. Households with employed wives had lower savings and investments than those with non-employed wives.
While housewives may be more resourceful when it comes
to financial management than working wives because of
the availability of time for research and expense-saving
practices, housewives may need better financial preparation
than working wives during an unexpected event. Finally,
households with homemaker wives may simply be at
higher economic strata than those with working wives.
Expectations of an inheritance indicate these women have
financially well-off parents or parents-in-law. Well-off
parents may be contributing to the financial well-being of
the working age married households directly and indirectly,
for example by babysitting grandchildren or by helping to
pay for housing or the grandchildrens education. Parental
support through labor or financial assistance reduces the
financial burden on the childrens households, thus generating a higher probability of having savings and investments. Households with fewer numbers of children were
more likely to have savings, investments, and more
investments relative to income. These trends are likely due
to the added expenditures required for each additional
child. In Japan, financial burden prevents some from having children and others from having more (Moriizumi
2005). Financial burden is the reason why childless married
couples choose not to have children (Yamada 2007), and
therefore it is argued that financial burdens are the cause of
lowering national fertility rates (Sakazume 2004).
Being more pessimistic about the future of the society
and economy, more satisfied with life, having a college
education, and owning a home were positively associated
with the likelihood for having had supplemental life
insurance expenditures. A great majority of the households
studied had expenditures for life insurance. Those few
households without such expenditures appear to have had
wives who were more optimistic about the current state of
the Japanese economy and society. Being more optimistic
about the economy and society may mean higher expectations that the national survivor benefit programs can and
will provide for families in an unexpected event, thus
lowering the need for private supplemental insurance.
The finding about the satisfaction with life is consistent
with that of the savings. More satisfaction was associated
with higher probability of being financially prepared, in
this case through having purchased supplemental life
insurance. Not having what most other households have
life insurancemay be the cause of lower satisfaction with
life. Households with college-educated wives generally
belong to higher social strata than households with noncollege-educated wives. Homeowners were more likely to
have had life insurance expenditures. In addition to possibly belonging to higher social strata than those that rent,
these households may be required to have sufficient life

123

insurance along with a mortgage. Finally, as was the case

for savings and investment, households with working wives
had lower expenditures on life insurance than those with
homemaker wives. Again, this implies higher socioeconomic strata for households that can afford housewives,
and it also indicates the greater needs of homemaker
households for financial preparedness in case of an unexpected loss of the current breadwinner.
The findings are noteworthy as they suggest economic
inequality could widen in the future as those who have and
are expecting to have more financial resources are more
likely to be prepared for future financial needs and wants
than those who do not have such resources. The concerns
about the future explained variations only in the payment
of life insurance. This finding gives micro level support for
an earlier study that linked the overall socioeconomic
status of a nation with the variations in life insurance
purchases in various OECD countries (Li et al. 2007).
This study focused on married women in Japan using a
cross-section research design. Utilizing the panel nature of
the data to examine the causality between the psychological factors and savings behavior may be helpful in projecting family economic well-being in a rapidly changing
society. Second, because the nature of gender differences
in savings behavior is complex (Whitaker et al. 2013),
focusing on husbands, if data become attainable, and
comparing spouse dynamics, may add to the literature.
Further, with an increase in the unmarried population,
understanding single women who may be less prepared
financially warrants a future study. For instance, those who
remained single had lower target wealth than their counterparts who married during the three-year observation
period (Kureishi and Wakabayashi 2011).
In closing, the findings of this study support that currently, social strata does exist and that it is likely to continue in the future. Beside household income, factors such
as college education, prospect for inheritance, number of
children, and home ownership were all associated with
financial preparedness. Prospect for inheritance, for
instance, is an indicator for intergenerational transmission
of economic resources. In addition, because asset holding
is positively associated with the expectation that the offspring attends college (Zhan and Sherraden 2011), intergenerational transmission of wealth is likely to continue to
the next generation, creating further social stratification
(Han and Sherraden 2009). Finally, this study suggests that
those who are opting out of pension systems may be less
likely to be investing money for their own future. The
economic gap will only widen without a social security
system that covers the entire society.
Acknowledgments The Institute for Research on Household Economics in Japan provided the data for this study. An earlier version of

J Fam Econ Iss

the study was presented at the American Council on Consumer
Interests 2010 Annual Meeting in Atlanta, Georgia in April 2010 and
was supported with funding from the US Department of Agricultures
Agricultural Experiment Station while the author was at the University of Georgia. I thank Karen Braxley, Sean Mihaljevich, Robert
Nielsen, Stephanie Short, and Lavon Smith for valuable suggestions
on earlier versions..

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Yoko Mimura is an Assistant Professor in the Department of Family

and Consumer Sciences at California State University Northridge in
Northridge, California. She received her Ph.D. from the University of
Georgia. Her current research projects are in the areas of family
economic hardship and consumer savings and expenditures.