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 share of total wage accruing to the top 1% wage earners has risen steadily in the last ten years. Using a simple time-series regression analysis, we find that marginal income tax rates, corporate performance, female labor 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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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number
14537.
Length: Date of creation: Dec 2008 Date of revision: Handle: RePEc:nbr:nberwo:14537
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Find related papers by JEL classification: D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General O15 - Economic Development, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
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