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Top wage incomes in Japan, 1951-2005

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  • Moriguchi, Chiaki

Abstract

Using wage income tax statistics, we construct continuous series of upper wage income shares in Japan from 1951 to 2005 to document the evolution of top wage incomes and investigate their long-run determinants. We find that, while the middle wage income class gained enormously both in absolute and relative terms during the period of high economic growth, the upper wage income class faired comparatively better after 1975. In particular, the shares of total wage accruing to the top 1% wage earners and above have risen steadily since the late 1990s. A simple time-series regression analysis indicates that marginal income tax rates, corporate performance, female labor force participation, and labor disputes are important determinants of top wage income shares in post-WWII Japan. Although not conclusive, our results suggest that much of the recent gains in wage income shares at the top can be explained by the changes in these four factors, placing a less emphasis on a story of structural change.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of the Japanese and International Economies.

Volume (Year): 24 (2010)
Issue (Month): 3 (September)
Pages: 301-333

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Handle: RePEc:eee:jjieco:v:24:y:2010:i:3:p:301-333

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Web page: http://www.elsevier.com/locate/inca/622903

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Keywords: Wage income Wage inequality Postwar Japan Marginal tax rates Executive compensation;

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References

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  1. Xu, Peng, 1997. "Executive Salaries as Tournament Prizes and Executive Bonuses as Managerial Incentives in Japan," Journal of the Japanese and International Economies, Elsevier, vol. 11(3), pages 319-346, September.
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  11. Feldstein, Martin, 1995. "Effect of Marginal Tax Rates on Taxable Income: A Panel Study of the 1986 Tax Reform Act," Scholarly Articles 2766676, Harvard University Department of Economics.
  12. Kato, Hideaki Kiyoshi & Lemmon, Michael & Luo, Mi & Schallheim, James, 2005. "An empirical examination of the costs and benefits of executive stock options: Evidence from Japan," Journal of Financial Economics, Elsevier, vol. 78(2), pages 435-461, November.
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Cited by:
  1. Marika Karanassou & Hector Sala, 2011. "Inequality and Employment Sensitivities to the Falling Labour Share," Working Papers 680, Queen Mary, University of London, School of Economics and Finance.
  2. Marika Karanassou & Hector Sala, 2010. "The Wage-Productivity Gap Revisited: Is the Labour Share Neutral to Employment?," Working Papers wpdea1006, Department of Applied Economics at Universitat Autonoma of Barcelona.

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