Wage distribution in Japan, 1989–2003 (original) (raw)
Related papers
2016
Using comprehensive government statistics, we show the extent to which wage inequality among men and women has increased in Japan from 1989 to 2013, and the factors that are behind the changes using the Dinardo, Fortin and Lemieux (DFL) and Firpo, Fortin and Lemieux (FFL) decomposition methods. First, we find that the increase in the wage rate prevailed in all quantiles in both genders in the 1990s, and the real wage rate inequality was unchanged. Second, since the 2000s, the wage rate of the middle wage workers has been reduced more than that of any other group. Along with other developed countries, the decrease in wages of the middle class is observed even in Japan during the 2000s, although Japan is known for its solid middle class. Among women, the 90-50 gap increased while the 50-10 gap decreased, which resulted in the unchanged overall inequality for female workers. Finally, our exercise using the FFL decomposition method reveals the contemporaneous occurrence of the decrease in the return on general human capital of males and top females and the increase in the return of firm-specific human capital among male workers with a high wage rate. This suggests that Japanese firms undermined employee involvement and problem solving activities at the grassroots level, which is considered as one of the key elements of Japanese employment system. Moreover, our findings suggest that Japanese firms invest in just a few selected able workers, regardless of their age, because they no longer have enough reserves to invest in all of their employees.
Perceptions of “Rising Inequality” in Japan: An Econometric Analysis
2003
Abstract Income inequality has recently aroused considerable public interest in Japan. However, empirical studies have documented that the distributions of income and wages have been rather stable for the same period. This contrast puzzles empirical researchers. We seek to find the sources of such an apparent discrepancy between statistics and perception concerning economic inequality.
Rising Wage Inequality Within Firms: Evidence from Japanese health insurance society data
2012
Using a novel dataset compiled from Japanese health insurance societies covering about 1,500 firms and 15 million employees in total, we examine wage inequality within and between firms. Employing the mean log deviation approach to decompose wage inequality into within-firm and between-firm inequality, we find that it increased among male employees during the period we examined (FY2003-2007). Moreover, even after controlling for changes in the compositional structure of firms' employees, an increase in wage inequality within firms can be observed, greatly contributing to the increase in overall wage inequality, which likely reflects the growing prevalence of performance-based wage systems.
Japan's New Inequality: Intersection of Employment Reforms and Welfare Arrangements
Asian Studies Review, 2012
Japan's New Inequality is a study of the effects of changes in welfare arrangements and employment reforms in Japan since the collapse of Japan's Bubble Economy in the late 1980s. This volume draws heavily on theories and methods of social stratification studies to explore three general areas: regular and non-regular divisions in labour markets (i.e. between permanent full-time and non-permanent part-time employees); changes in employment structures for women and the self-employed; and changes in family structure, the ageing population and welfare provisions. This volume provides a concise and up-to-date picture of income, wealth and employment inequalities in Japan.
Inequalities and Unfair Income Distribution in Japan
World Journal of Applied Economics, 2020
There has been a debate about what measurement is most appropriate for measuring inequality because the classical index does not distinguish between what is fair and unfair distribution of income. In this empirical study, the "Responsibility-Sensitive Egalitarian Theory" is applied for the case of Japan. Our paper firstly tracks the historical evolution of inequalities and concludes that the Japanese accept pre-tax income inequality because they believe their socioeconomic class is determined by luck. Secondly, illustrating the Unfairness Lorenz Curve by gender shows that females face more unfairness than males: the pre-tax income of middle-income males increases slightly compared to the fair-income group from 2010 to 2013. However, the opposite is true for females in the bottom and middle classes. Considering there already exists a gender wage gap in Japan, it is necessary to take action to reduce inequality.
Wage and Productivity Differentials in Japan: The Role of Labor Market Mechanisms
This paper aims at explaining two stylized facts of the Lost Decade in Japan: rising wage inequalities and increasing firm-level productivity differentials. We build a model where firms can choose between efficiency wages with endogenous effort and competitive wages, and show that it can replicate those facts. Using Japanese microeconomic data, we find support for the existence of efficiency wages in one group of firms and competitive wages in the other group. Based on those results, a simulation shows that the share of firms using efficiency wages has declined, within sectors, during the Lost Decade, as predicted by the model. Yannick KALANTZIS, Ryo KAMBAYASHI, and Sébastien LECHEVALIER
Regional Income Inequality in the Post-War Japan
Ersa Conference Papers, 2003
The objective of this study is to measure regional income inequalities in Japan in the postwar period by using the weighted coefficient of variation and the Theil T index and explore factors determining regional income inequalities by using several inequality decomposition techniques. Regional inequality in per capita GDP, as measured by the weighted coefficient of variation, first increased and reached a peak in 1958 at 0.38. It then declined steadily and hit the bottom at 0.25 in 1979. After 1979, it rose again and reached a peak in 1990 at 0.37. There is a declining trend after 1990. To a considerable extent, regional inequality in per capita GDP is determined by regional inequality in labor productivity. Regional inequality in labor participation rate is not significant in the determination. A rapid rise in primary sector's inequality in per capita GDP is attributable to a rise in its inequality in employment share. On the other hand, a decrease in secondary sector's inequality in per capita GDP until the middle of the 1970s is due mainly to a fall in its inequality in employment share, while a decrease in tertiary sector's inequality in per capita GDP until the middle of 1960s is attributable to a fall in its inequality in both labor productivity and employment share. Finally, a rise and a fall in secondary and tertiary sectors' inequalities in per capita GDP in the 1980s and the 1990s are determined by their inequalities in labor productivity, since their inequalities in employment share were low and stable in the period.
The Re segmentation of the Japanese labor market Investigating the impact of industrial dynamics
The purpose of this paper is to propose a synthesis and an original interpretation of recent empirical works dealing with inequalities in Japan. Most of them have been able to use panel micro data – and sometimes linked employers-employees data – and it has allowed them disentangling individual and firm effects and linking the evolutions of productivity dispersion and of wage differentials. The major result is that rising inequalities in Japan from the 1990s correspond to a large extent to an unprecedented growth in the disparity of wages and employment security between wage earners of comparable status, working in firms of similar size and belonging to the same sector. The second result is that it is possible to link these structural changes on the labor market to industrial dynamics, namely deindustrialization and increasing corporate heterogeneity. We interpret this evolution as a 'resegmentation' of the Japanese labor market.