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Institutions, Deindustrialization, and Functional Income Distribution in Japan

In: Labor Income Share in Asia

Author

Listed:
  • Kyoji Fukao

    (Hitotsubashi University)

  • Cristiano Perugini

    (University of Perugia)

Abstract

We investigate the long-term drivers of the labor share in Japan using data from the Japanese Industrial Productivity database from 1970 to 2012. The descriptive and econometric results indicate that the decline in the labor share observed in Japan during the period of analysis was highly concentrated in the low-knowledge-intensity sectors, the employment share of which has increased remarkably. These sectors also experienced a strong increase in non-regular workers, who constitute a secondary segment of the labor market in Japan, characterized by low wages and very limited union coverage. The low level of protection of this group of workers and the increase in market power concentration have probably contributed to reducing the bargaining power of labor vis-à-vis employers and, consequently, the labor share.

Suggested Citation

  • Kyoji Fukao & Cristiano Perugini, 2019. "Institutions, Deindustrialization, and Functional Income Distribution in Japan," ADB Institute Series on Development Economics, in: Gary Fields & Saumik Paul (ed.), Labor Income Share in Asia, chapter 0, pages 231-245, Springer.
    • Handle: RePEc:spr:adbchp:978-981-13-7803-4_9
    DOI: 10.1007/978-981-13-7803-4_9
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    More about this item

    Keywords

    Labor share; Non-regular work; Markup; Japan;
    All these keywords.

    JEL classification:

    • E25 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Aggregate Factor Income Distribution
    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology

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