How Inclusive is Abenomics?

We assess the ongoing reform efforts in Japan in terms of inclusive growth. We use prefectural level panel data to regress a measure of inclusive growth, and its components of both average income growth and income inequality, on macroeconomic and policy variables. Our analysis suggests that achievin...

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Bibliographic Details
Published in:Journal of international commerce, economics and policy economics and policy, 2016-02, Vol.7 (1), p.np-np
Main Authors: Aoyagi, Chie, Ganelli, Giovanni, Murayama, Kentaro
Format: Article
Language:English
Subjects:
Averages
Deflation
Economic growth
Economic models
Economic policy
Economic reform
Equality
Income inequality
Inflation
Japan
Labor market
Macroeconomics
Panel data
Side effects
Women
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Summary:We assess the ongoing reform efforts in Japan in terms of inclusive growth. We use prefectural level panel data to regress a measure of inclusive growth, and its components of both average income growth and income inequality, on macroeconomic and policy variables. Our analysis suggests that achieving the Bank of Japan’s 2% inflation target has a positive effect on average income growth, but an adverse effect on income equality. In contrast, achieving higher female labor participation, lower duality, and larger labor input — which are included in the package of structural reforms planned under Abenomics — is found to be effective in fostering inclusive growth. While implementation of those policies can improve higher average income growth, only the female labor participation is found to improve the equality as well. The main policy implication of our analysis is that full implementation of structural reforms — especially labor market reforms — is necessary to both foster growth and increase equality.
ISSN:1793-9933
1793-9933
DOI:10.1142/S1793993316500058