Income distribution of Japan: historical perspective and its implicatios

The rapid rise in income inequality in Japan since the 1980s is attracting strong attention. In what now seems like a world apart, inequality during the preceding periods of high followed by stable growth was low, and Japan was regarded as being the most egalitarian country in the world. During the prewar period and especially during the interwar years, inequality was marked, and this period is drawing interest for its contrast with contemporary Japan. This author has calculated estimates of the income distribution in prewar Japan, compilation and organization of the materials for which commenced in the 1970s, and the results of estimates and analysis were published in book form in 1996 (Minami 1996). Compilation of data continued, and final estimates were published in 2000 (Minami 2000). This paper reviews this research and compares and contrasts the situation then with that in contemporary Japan. Section II of this paper reviews the basic sources used to calculate these estimates, and summarizes the estimation methods. The period covered is from the end of the 19th century to the end of the 1930s. Section III consists of an analysis of the estimate findings, and examines how income distribution changed and explores the factors underlying these changes. Section IV describes the gap between the prewar and postwar periods, and changes in the postwar period. Lastly, Section V offers some conclusions and their implications.