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Income Inequality, Poverty and Social Spending in Japan

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  • Randall S. Jones

Abstract

Income inequality and relative poverty among the working-age population in Japan have risen to levels above the OECD average. This trend is partially explained by labour market dualism, with an increasing proportion of non-regular workers who are paid significantly less than regular workers, as well as by other factors, including the ageing of the workforce. Social spending as a share of GDP has been expanding in the context of population ageing, although it remains below the OECD average and the proportion received by low-income households is small. Consequently, the impact of social spending on inequality and poverty is weak compared to other OECD countries and inadequate to offset the deterioration in market income. The scope for increasing social spending is constrained by the fiscal situation. Instead, reversing the upward trend in inequality and poverty requires reforms to reduce labour market dualism and better target social spending on low-income households, particularly single parents. This Working Paper relates to the 2006 OECD Economic Survey of Japan (www.oecd.org/eco/surveys/japan). Inégalité des revenus, pauvreté et dépenses sociales au Japon L’inégalité des revenus et la pauvreté relative parmi la population active ont progressé au Japon jusqu’à des niveaux supérieurs à la moyenne de l’OCDE. Cette évolution s’explique en partie par le dualisme du marché du travail - la proportion croissante de travailleurs non réguliers, qui sont rémunérés sensiblement moins que les travailleurs réguliers - ainsi que par d’autres facteurs comme le vieillissement de la population active. Les dépenses sociales en pourcentage du PIB se sont accrues du fait du vieillissement de la population, mais restent inférieures à la moyenne de l’OCDE, alors que le pourcentage de ces dépenses allant aux ménages à bas revenu est faible. L’incidence des dépenses sociales sur l’inégalité et la pauvreté est donc peu marquée, par rapport à ce qui est le cas dans les autres pays de l’OCDE, et insuffisante pour compenser la dégradation du revenu marchand. Les possibilités d’augmentation des dépenses sociales sont limitées par la situation budgétaire. Pour inverser la tendance à l’aggravation de l’inégalité et de la pauvreté, il faudrait plutôt mettre en oeuvre des réformes visant à réduire le dualisme du marché du travail et à mieux cibler les dépenses sociales sur les ménages à faible revenu, en particulier les pères ou mères célibataires. Ce Document de travail se rapporte à l’Étude économique de l’OCDE du Japon, 2006 (www.oecd.org/eco/etudes/japon).

Suggested Citation

  • Randall S. Jones, 2007. "Income Inequality, Poverty and Social Spending in Japan," OECD Economics Department Working Papers 556, OECD Publishing.
  • Handle: RePEc:oec:ecoaaa:556-en
    DOI: 10.1787/177754708811
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    Citations

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    Cited by:

    1. Ms. Chie Aoyagi & Mr. Giovanni Ganelli, 2013. "The Path to Higher Growth: Does Revamping Japan’s Dual Labor Market Matter?," IMF Working Papers 2013/202, International Monetary Fund.
    2. Machikita, Tomohiro & Sato, Hitoshi, 2016. "Temporary jobs and globalization," IDE Discussion Papers 585, Institute of Developing Economies, Japan External Trade Organization(JETRO).
    3. Wim Suyker, 2007. "The Chinese economy, seen from Japan and the Netherlands," CPB Memorandum 185.rdf, CPB Netherlands Bureau for Economic Policy Analysis.
    4. Nakamura, Sayaka, 2014. "Parental income and child health in Japan," Journal of the Japanese and International Economies, Elsevier, vol. 32(C), pages 42-55.
    5. Khalid Zaman & Bashir Khilji, 2014. "A note on pro-poor social expenditures," Quality & Quantity: International Journal of Methodology, Springer, vol. 48(4), pages 2121-2154, July.
    6. EDO Onome Christopher, 2021. "Direct Taxes and Income Redistribution in Nigeria," GATR Journals gjbssr596, Global Academy of Training and Research (GATR) Enterprise.
    7. Christoph A. Schaltegger & Martin Weder, 2013. "Will Europe Face A Lost Decade? A Comparison With Japan's Economic Crisis," CREMA Working Paper Series 2013-03, Center for Research in Economics, Management and the Arts (CREMA).
    8. Aoyagi, Chie & Ganelli, Giovanni, 2015. "Does revamping Japan's dual labor market matter?," Economic Systems, Elsevier, vol. 39(2), pages 339-357.
    9. Hirao, Tomotaka & Igawa, Shizue & Okajima, Yuko, 2023. "Determinants of Satisfaction with Work-Life Balance: A Case Study of a Medium-Sized Japanese Company," SocArXiv qgd6y, Center for Open Science.
    10. Chie Aoyagi & Giovanni Ganelli & Kentaro Murayama, 2016. "How Inclusive is Abenomics?," Journal of International Commerce, Economics and Policy (JICEP), World Scientific Publishing Co. Pte. Ltd., vol. 7(01), pages 1-28, February.
    11. Franz Waldenberger, 2013. "Confronting earthquake risk in Japan—are private households underinsured?," Asia Europe Journal, Springer, vol. 11(1), pages 79-91, March.
    12. Wim Suyker, 2007. "The Chinese economy, seen from Japan and the Netherlands," CPB Memorandum 185, CPB Netherlands Bureau for Economic Policy Analysis.

    More about this item

    Keywords

    absolute poverty; coefficient de Gini; distribution des revenus; dualisme du marché du travail; dépenses sociales; employment protection; Gini coefficient; income distribution; income inequality; inégalité des revenus; Japan; Japon; labour market dualism; non-regular workers; pauvreté absolue; pauvreté relative; protection; protection de l'emploi; relative poverty; social spending; travailleurs non réguliers;
    All these keywords.

    JEL classification:

    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs

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