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Dimensions of inequality in Japan: Distributions of earnings, income and wealth between 1984 and 2014

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  • Sagiri Kitao
  • Tomoaki Yamada

Abstract

Inequality has become a central policy issue across the world. We study trends of inequality in earnings, income and wealth across households in Japan, using the National Survey of Family Income and Expenditure (NSFIE) from 1984 to 2014. We focus on the transition of inequality unconditionally and conditionally across various dimensions of household heterogeneity such as age, cohort, employment and marital status of household heads, sources of income, family size, etc. Inequality in earnings, income and wealth all increased during the last three decades. Changes in earnings and income inequality were mostly driven by demographic shift in the population towards the elderly, who tend to have higher inequality. Wealth inequality rose not only in the aggregate but also among the young, and this is due to a major increase in the fraction of households who own zero or very low wealth across all age groups. Critical factors in understanding inequality trends in Japan that we identified are aging demographics, changes in typical household structure, and macroeconomic trends of the past decades including the financial bubble period and a decades-long slow-down thereafter.

Suggested Citation

  • Sagiri Kitao & Tomoaki Yamada, 2019. "Dimensions of inequality in Japan: Distributions of earnings, income and wealth between 1984 and 2014," CAMA Working Papers 2019-36, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
  • Handle: RePEc:een:camaaa:2019-36
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    Cited by:

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    2. R. Anton Braun & Daisuke Ikeda, 2020. "Why Cash Transfers Are Good Policy in the COVID-19 Pandemic," Policy Hub 2020-4, Federal Reserve Bank of Atlanta.

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    More about this item

    Keywords

    Distributions of wealth; earnings and income; inequality; demographic aging; Japanese economy.;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D15 - Microeconomics - - Household Behavior - - - Intertemporal Household Choice; Life Cycle Models and Saving
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth

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