The Evolution of Income Concentration in Japan, 1886-2002: Evidence from Income Tax Statistics
This paper studies the evolution of income concentration in Japan from 1886 to 2002 by constructing long-run series of top income shares and top wage income shares, using income tax statistics. We find that (1) income concentration was extremely high throughout the pre-WWII period during which the nation underwent rapid industrialization; (2) a drastic de-concentration of income at the top took place in 1938-1945; (3) income concentration has remained low throughout the post-WWII period despite the high economic growth; and (4) top income composition in Japan has shifted dramatically from capital income to employment income over the course of the 20th century. We attribute the precipitous fall in income concentration during WWII primarily to the collapse of capital income due to wartime regulations and inflation. We argue that the change in the institutional structure under the occupational reforms made the one-time income de-concentration difficult to reverse. In contrast to the sharp increase in wage income inequality observed in the United States since 1970, the top wage income shares in Japan have remained remarkably stable over the recent decades. We show that the change in technology or tax policies alone cannot account for the comparative experience of Japan and the United States. Instead we suggest that institutional factors such as corporate governance and union structure are important determinants of wage income inequality.
|Date of creation:||Oct 2006|
|Publication status:||published as Chiaki Moriguchi & Emmanuel Saez, 2008. "The Evolution of Income Concentration in Japan, 1886-2005: Evidence from Income Tax Statistics," The Review of Economics and Statistics, MIT Press, vol. 90(4), pages 713-734, 07.|
|Contact details of provider:|| Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.|
Web page: http://www.nber.org
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Jean-Marc Burniaux & Thai-Thanh Dang & Douglas Fore & Michael F. Förster & Marco Mira d'Ercole & Howard Oxley, 1998. "Income Distribution and Poverty in Selected OECD Countries," OECD Economics Department Working Papers 189, OECD Publishing.
- Lee Soltow, 1968. "Long-Run Changes in British Income Inequality," Economic History Review, Economic History Society, vol. 21(1), pages 17-29, 04.
- Lindert, Peter H. & Williamson, Jeffrey G., 1985. "Growth, equality, and history," Explorations in Economic History, Elsevier, vol. 22(4), pages 341-377, October.
- Simon Kuznets & Elizabeth Jenks, 1953.
"Shares of Upper Income Groups in Income and Savings,"
National Bureau of Economic Research, Inc, number kuzn53-1.
- Simon Kuznets, 1950. "Shares of Upper Income Groups in Income and Savings," NBER Books, National Bureau of Economic Research, Inc, number kuzn50-1.
- John M. Abowd & David S. Kaplan, 1999. "Executive Compensation: Six Questions That Need Answering," Journal of Economic Perspectives, American Economic Association, vol. 13(4), pages 145-168, Fall.
- John M. Abowd & David S. Kaplan, 1999. "Executive Compensation: Six Questions that Need Answering," NBER Working Papers 7124, National Bureau of Economic Research, Inc.
- Thomas Piketty & Gilles Postel-Vinay & Jean-Laurent Rosenthal, 2006. "Wealth Concentration in a Developing Economy: Paris and France, 1807–1994," American Economic Review, American Economic Association, vol. 96(1), pages 236-256, March.
- Piketty, Thomas & Postel-Vinay, Gilles & Rosenthal, Jean Laurent, 2004. "Wealth Concentration in a Developing Economy: Paris and France, 1807-1994," CEPR Discussion Papers 4631, C.E.P.R. Discussion Papers.
- Thomas Piketty & Gilles Postel-Vinay & Jean-Laurent Rosenthal, 2005. "Wealth concentration in a developing economy : Paris and France, 1807-1994," Research Unit Working Papers 0504, Laboratoire d'Economie Appliquee, INRA.
- Thomas Piketty & Gilles Postel-Vinay & Jean-Laurent Rosenthal, 2006. "Wealth concentration ina developing economy: Paris and France, 1807-1994," Post-Print halshs-00754643, HAL.
- Hayashi, Fumio & Ando, Albert & Ferris, Richard, 1988. "Life cycle and bequest savings A study of Japanese and U.S. households based on data from the 1984 NSFIE and the 1983 survey of consumer finances," Journal of the Japanese and International Economies, Elsevier, vol. 2(4), pages 450-491, December.
- Hart,Robert A. & Kawasaki,Seiichi, 1999. "Work and Pay in Japan," Cambridge Books, Cambridge University Press, number 9780521577724.
- Hart,Robert A. & Kawasaki,Seiichi, 1999. "Work and Pay in Japan," Cambridge Books, Cambridge University Press, number 9780521571371, February.
- Feldstein, Martin, 1995. "The Effect of Marginal Tax Rates on Taxable Income: A Panel Study of the 1986 Tax Reform Act," Journal of Political Economy, University of Chicago Press, vol. 103(3), pages 551-572, June.
- Martin Feldstein, 1993. "The Effect of Marginal Tax Rates on Taxable Income: A Panel Study of the1986 Tax Reform Act," NBER Working Papers 4496, National Bureau of Economic Research, Inc.
- Emmanuel Saez & Michael R. Veall, 2005. "The Evolution of High Incomes in Northern America: Lessons from Canadian Evidence," American Economic Review, American Economic Association, vol. 95(3), pages 831-849, June.
- Okazaki Tetsuji, 1993. "The Japanese Firm under the Wartime Planned Economy," Journal of the Japanese and International Economies, Elsevier, vol. 7(2), pages 175-203, June.
- "Hoshi, Takeo", 2002. "Japanese Corporate Governance," Economic Review, Hitotsubashi University, vol. 53(4), pages 289-304, January.
- Takeo Hoshi & Anil Kashyap, 2004. "Corporate Financing and Governance in Japan: The Road to the Future," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262582481, July.
- Lindert, Peter H, 1986. "Unequal English Wealth since 1670," Journal of Political Economy, University of Chicago Press, vol. 94(6), pages 1127-1162, December.
- Minami, Ryoshin, 1998. "Economic Development and Income Distribution in Japan: An Assessment of the Kuznets Hypothesis," Cambridge Journal of Economics, Oxford University Press, vol. 22(1), pages 39-58, January.
- Fumio OHTAKE, 2008. "Inequality in Japan," Asian Economic Policy Review, Japan Center for Economic Research, vol. 3(1), pages 87-109.
- Motohiro Morishima, 1991. "Information Sharing and Collective Bargaining in Japan: Effects on Wage Negotiation," ILR Review, Cornell University, ILR School, vol. 44(3), pages 469-485, April. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:12558. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()
If references are entirely missing, you can add them using this form.