Top Wage Incomes in Japan, 1951-2005

Working Paper No. 14537 Using wage income tax statistics, we construct continuous series of upper wage income shares in Japan from 1951 to 2005 to document the evolution of top wage incomes and investigate their long-run determinants. We find that, while the middle wage income class gained enormousl...

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Bibliographic Details
Published in:NBER Working Paper Series 2008-12, p.14537
Main Author: Moriguchi, Chiaki
Format: Article
Language:English
Subjects:
Boards of directors
Compensation
Economic theory
Employees
Employers
Employment
Estimates
Income distribution
Income inequality
Income shifting
Income taxes
Part time employment
Tax rates
Wages & salaries
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Summary:Working Paper No. 14537 Using wage income tax statistics, we construct continuous series of upper wage income shares in Japan from 1951 to 2005 to document the evolution of top wage incomes and investigate their long-run determinants. We find that, while the middle wage income class gained enormously both in absolute and relative terms during the period of high economic growth, the upper wage income class faired comparatively better after 1975. In particular, the share of total wage accruing to the top 1% wage earners has risen steadily in the last ten years. Using a simple time-series regression analysis, we find that marginal income tax rates, corporate performance, female labor participation, and labor disputes are important determinants of top wage income shares in post-WWII Japan. Although not conclusive, our results suggest that much of the recent gains in wage income shares at the top can be explained by the changes in these four factors, placing a less emphasis on a story of structural change.
ISSN:0898-2937
DOI:10.3386/w14537