Changes in Subjective Mortality Due to COVID-19 and Its Vaccination: The Influence on Saving Behavior in Japan

Abstract During the COVID-19 pandemic, while broad social anxiety spread, some individuals might have perceived a heightened risk of dying in the near future, whereas the subsequent rollout of vaccines might have provided a sense of relief by lowering these short-term mortality expectations. This study explored how COVID-19 and vaccination influenced subjective mortality and saving behavior. Referring to the life cycle model, we hypothesized that an increase in subjective mortality due to COVID-19 negatively affects and a decrease in mortality due to vaccination positively affects saving. In January 2022, we conducted an online survey in Japan with 3500 individuals aged 20–79 years who were working or whose spouses were working. We analyzed the determinants of the share of savings in income. Considering the endogeneity of subjective mortality, we estimated the savings equation using the instrumental variable method, conducting analyses for the full sample as well as for two specific groups: those under 65 and those aged 65 and over. The analysis revealed that individuals who felt their mortality increased due to the pandemic exhibited lower savings in the full sample and the 65-and-over age group. Those who felt that their mortality decreased after vaccination tended to save more. However, vaccination alone did not significantly affect savings. Regarding the experience of COVID-19 infection, it showed no significant impact on savings for the full sample and those under 65, whereas it exhibited a significant positive impact exclusively for the sample aged 65 and over at the 10% level. JEL Classification D10, I10, J10