Reona Hagiwara

Personal Information

・Current Position: Assistant Professor, School of Political Science and Economics, Waseda University

・Research Interests: Macroeconomics, Fiscal Policy, Social Security, Welfare Analysis

・E-mail: reona<dot>hagiwara<at>aoni.waseda.jp (office), hagi12141992<at>gmail.com (private and permanent)

・Education: 

　・Hitotsubashi University (Ph.D. in Economics, February, 2021)

　・Hitotsubashi University (MA in Economics, March, 2016)

　・Hitotsubashi University (BA in Economics, March, 2015)

・CV: CV (pdf) 　 

Publication Papers

・"Seigniorage and Japanese fiscal sustainability: Simulation analysis using an overlapping generations model" In Economic Modelling, 84, 340-356 (2020)

[Abstract] This study examines two tax policies for achieving fiscal sustainability in Japan: (i) an increase in consumption tax and (ii) consumption tax hike combined with inflation. To evaluate these policies from both fiscal and welfare perspectives, I develop a multi-period overlapping generations model with money. The results reveal that, compared to the first policy, the second policy can substantially delay the timing of and curb the increase in consumption tax through seigniorage revenue. This suggests seigniorage could be a useful tool for the Japanese government in resolving its fiscal problems. In addition, in an aging Japan, the second policy can enhance future generations’ utility. Because inflation reduces money holdings and utility of the elderly, policies that cause inflation in the present but reduce it in the future improve the utility of future generations. From a social welfare viewpoint, such policies are desirable in a government that has foresight.

Books

・『在職老齢年金制度の見直しによる経済効果』 公益財団法人 三菱経済研究所 (2021)

Working Papers/Discussion Papers

・"Welfare Effects of Health Insurance Reform: The Role of Elastic Medical Demand" IMES Discussion Paper Series 2022-E-5 (2022), latest version (R&R)

[Abstract] Some medical demand is inelastic to price changes, but not all. In assessing the effects of public health insurance reform on welfare, I examine the role of medical demand elasticity by developing a computational general equilibrium life-cycle model of the Japanese economy. The model features individual heterogeneity in health, income, and wealth. If all medical demand is inelastic, reforming public health insurance by increasing copayments reduces welfare for all current generations. However, if some medical demand is elastic, as is empirically observed, such a reform would improve welfare for current young generations, including those with poor health and low income. Furthermore, future generations benefit from the reform and their welfare increases significantly.

・"Medical Expenditure Risk and Liquidity Premium" Working Paper (2024)

(Previous Title:  Aging, Healthcare System, and Interest Rates)

[Abstract] Over the past few decades, the Japanese economy has experienced a widening gap between returns on illiquid capital and liquid bonds (i.e., the liquidity premium). This paper focuses on the role of medical expenditure risk on household asset portfolios and examines the impact of structural changes, including demographics and medical systems, on the trends of the gap. I develop a general equilibrium overlapping generations model with two kinds of assets, liquid and illiquid, in which households face uncertainty in health and medical costs. I find that both structural changes could have resulted in the increasing liquidity premium. The aging of the population has pushed down the bond return much more than the capital return. The rise in out-of-pocket medical costs has led to higher capital return and lower bond return by shifting the asset portfolio of older households from illiquid to liquid. In particular, the decomposition shows that the latter contribution would be significant. The results suggest that future structural changes will lead to a further increase in the premium, even after accounting for the larger supply of government bonds.

・"Macroeconomic and Welfare Effects of Family Policy: Cash Transfers vs In-kind Benefits" Working Paper (2024)

[Abstract] A pressing issue facing many advanced countries, including Japan, is how to increase fertility. How do family policies affect household decisions on fertility, labor supply, and welfare? To examine and compare the macroeconomic and welfare effects of expanding cash and in-kind childcare benefits, I develop a general equilibrium overlapping generations model with endogenous fertility of the Japanese economy. The model includes single and married households, and married couples face two trade-offs: (i) child quantity vs. child quality, and (ii) childcare time vs. working time. Simulation results indicate that both childcare reforms lead to higher fertility. The demographic change will bring about welfare gains for all future households due to the reduction in social security taxes. Such positive effects are expected to be larger in the case of in-kind benefits, because the benefits would also increase female labor supply. In particular, in-kind benefits induce high-educated couples with high opportunity costs of having children to increase fertility and welfare by reducing the childcare time.

Work In Progress

・Social Security Reform and Labor Supply of the Elderly in Japan

・Impacts of Universal LTCI with Cash Benefits on Heterogeneous Family 

Last Update: April 2024

Disclaimer: This is Reona Hagiwara's personal website. This website is used to disseminate my research publicly. The views expressed in this webpage are solely the responsibility of the author.