In the 21st century, nations such as Japan must confront not only an aging society, but also national disasters (e.g., earthquake, typhoon, and flood) and international disputes (e.g., war and terrorism). In an aging society, the population of older generation increases but the number of children and the population of working generation decreases. Productivity efficiency decreases and economic growth decline even if productivity is improved. To ameliorate those effects, economic agents promote the accumulation of human capital. Additionally, the enrichment of education makes agents secure with life risk because education enhances the agents’ abilities and their income. Nevertheless, the nation must also confront national risks and controversial issues related to national security policy. For the agents, national risk affects consumption and saving behaviour because the environment around agents changes.
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This work was supported by USPS KAKENHI Grant Numbers JP16H03635 and JP16K03719. A previous version of this paper was presented at the 2018 Fall conference of Japan Association for Applied Economics at Daito Bunka University. The author thanks Junko DOI, Daisuke IKAZAKI, Masafumi TSUBUKU, and other participants for useful comments to the previous version of this paper.
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