Inequality growing again in Japan

Aug 23, 2023 | News On Japan

TOKYO - Income inequality is growing again in Japan and approaching a record level due to increase in the elderly and lower incomes among active workers, according to the results of a survey released by the Ministry of Health, Labour and Welfare.

Initial income—income received before payment of direct taxes and receipt of any social benefits such as a pension—worsened in the survey compared to the previous study in 2017 and inequality is almost on a par with the worst-ever level achieved in 2014.

Adjusted after redistribution, which calculates inequality following the payment of taxes and receipt of benefits, improves the Gini level significantly to 0.3813.

“Results show the redistribution functions (such as taxes and benefits) have a certain effect,” a ministry statement said.

The ministry conducted the survey using the Gini coefficient that measures inequality. The index ranges between 0, which is perfect equality, and 1, which is perfect inequality.

Japan scored 0.0057 for initial income on the Gini coefficient in the survey conducted among 8,042 households from July to August, 2021.

In 2017, Japan’s Gini coefficient was 0.5594 and three years earlier had been 0.5704, the biggest-ever inequality gap since records began collation in 1962

Average household initial income was 4,234,000 yen, which grew to 5,042,000 yen following redistribution. Among elderly households comprising people aged 65 and older, initial income was 1,247,000 yen, which grew by 2.92 times after redistribution to 3,641,000 yen.

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