Japan

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Overview of Trends of Economic Inequality in Japan

 

Has the dispersion of earnings been increasing in recent decades?No, the top decile as a percentage of the median was narrowing in the 1960s and 1970s. However the ratio shows little evident trend afterwards.
Has overall inequality increased in recent years?Yes, the Gini coefficient shows an upward trend from 1980 to early 2000s, after which Gini appears to be relatively stable.
Have there been periods when overall inequality fell for a sustained period?The evidence is incomplete. However, the substantial difference between available observations in 1938 and 1945, as well as the visible drop in top income shares, suggests that the Second World War was accompanied by substantial redistribution.
Has poverty been falling or rising in recent decades?Rising from early 80s to 2000.
Has there been a U-pattern for top income shares over time?No. Post-Second World War shares lower than before war and remained relatively stable. The recovery of top income shares since the end of the 1990s is evident but not salient.
Has the distribution of wealth followed the same pattern as income?Insufficient evidence.
Additional noteworthy featuresDifference before and after Second World War. Relative stability of earnings dispersion.

Sources and References

Sources for the historical data series:

Overall inequality: series 1, Gini coefficient for household income (pre-tax and transfers and not equivalised) for the pre-second World War period from Minami (1998, Table 4) (source also cited by Hayami (1997, Table 7.2) and Moriguchi and Saez (2010, Figure 3.2)); Gini coefficient for redistributed (disposable) income, series 2, from the Income Redistribution Survey, from Tachibanaki (2005, Table 1.1); series 3, annual Gini coefficient for equivalised disposable household income from 1981 taken from the research of Lise et al. (2014) using data from the Family Income and Expenditure Survey (FIES).

Top income shares: Share of top 1 per cent in total gross income from WTID, based on work of Moriguchi and Saez (2010).

Poverty: From website of OECD, Growing Unequal?

Individual earnings: Series 1 computed by Facundo Alvaredo based on work by Moriguchi and Saez (2010), Appendix 3C, covering all employees in the private sector who worked for the same employee throughout a calendar year, excluding temporary workers with job durations below one year, regular employees hired mid-year, government employees and retirees; Series 2 from OECD iLibrary, Employment and Labour Market Statistics, Gross earnings decile ratios;

Wealth: Gini coefficient for net worth for all population (home-owners and tenants) from Tachibanaki (2005, Table 1.10).

References:

  • Hayami, Y, 1997, Development economics, Clarendon Press, Oxford.
  • Lise, J, Sudo, N, Suzuki, M, Yamada, K and Yamada, T, 2014, “Wage, income and consumption inequality in Japan, 1981–2008 : From boom to lost decades”, Review of Income Dynamics
  • Minami, R, 1998, “Economic development and income distribution in Japan: An assessment of the Kuznets hypothesis”, Cambridge Journal of Economics, vol 22: 39-58.
  • Moriguchi, C and Saez, E, 2010, “The evolution of income concentration in Japan, 1886-2005: Evidence from income tax statistics” in A B Atkinson and T Piketty, editors, Top income: A global perspective, Oxford University Press, Oxford.
  • Tachibanaki, T, 2005, Confronting income inequality in Japan, MIT Press, Cambridge.