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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.

Suggested Citation

  • Moriguchi, Chiaki, 2010. "Top wage incomes in Japan, 1951-2005," Journal of the Japanese and International Economies, Elsevier, vol. 24(3), pages 301-333, September.
  • Handle: RePEc:eee:jjieco:v:24:y:2010:i:3:p:301-333
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    Cited by:

    1. Fumio Ohtake & M. Kohara & N. Okuyama & K. Yamada, 2013. "GINI Country Report: Growing Inequalities and their Impacts in Japan," GINI Country Reports japan, AIAS, Amsterdam Institute for Advanced Labour Studies.
    2. Marika Karanassou & Hector Sala, 2012. "Inequality and Employment Sensitivities to the Falling Labour Share," The Economic and Social Review, Economic and Social Studies, vol. 43(3), pages 343-376.
    3. YOKOYAMA Izumi & KODAMA Naomi & HIGUCHI Yoshio, 2016. "What Happened to Wage Inequality in Japan during the Last 25 Years? Evidence from the FFL decomposition method," Discussion papers 16081, Research Institute of Economy, Trade and Industry (RIETI).
    4. Karanassou, Marika & Sala, Hector, 2010. "The Wage-Productivity Gap Revisited: Is the Labour Share Neutral to Employment?," IZA Discussion Papers 5092, Institute for the Study of Labor (IZA).
    5. Timothy Neal, 2013. "Using Panel Co-Integration Methods To Understand Rising Top Income Shares," The Economic Record, The Economic Society of Australia, vol. 89(284), pages 83-98, March.
    6. José Félix Sanz-Sanz & María Arrazola-Vacas & Nuria Rueda-López & Desiderio Romero-Jordán, 2015. "Reported gross income and marginal tax rates: estimation of the behavioural reactions of Spanish taxpayers," Applied Economics, Taylor & Francis Journals, vol. 47(5), pages 466-484, January.

    More about this item

    Keywords

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

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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