Economic Analysis Series No.192THE ECONOMIC ANALYSIS

New Evidence on Income Distribution and Economic Growth in Japan

By Masako OYAMA

Abstract

There have been many theoretical and empirical researches on the effects of income distribution on economic growth. Theoretically, the effects of income distribution on growth have both signs and the overall effect is an empirical problem. Therefore, this paper uses Japanese prefectural panel data from 1979 to 2010 in order to empirically analyze how income distribution has affected economic growth in Japan.

Four measures of the income distribution are used in the system GMM estimations and the Arellano-Bond GMM estimations. The Gini indices, income share of the third quintile and the ratio of the income share of the top decile and the 5th decile show that income equality has positive effects on growth. The ratio of the income shares of the bottom decile and the 5th decile does not have statistically significant effects.

Therefore, the estimation results show that the income equality at different levels of income had different effect on economic growth in recent Japan. This result is consistent with existing researches and considered to be robust.

The channels through which the income equality affected economic growth are planned to be investigated next. For example, the effects through investment in human capital or physical capital are to be estimated in the future research.

JEL Classification Number: D31, O47, C2
Key Words: Income distribution, economic growth, panel data

The Impact of Job Loss on Health

By Kazuma SATO

Abstract

This study examines the effect of job loss on health by using the Keio Household Panel Survey.

The Japanese labor market has deteriorated and unemployment has also increased since the collapse of the bubble economy. Job loss is considered to have many impacts on the employee.

In particular, health can be damaged owing to the huge decrease of income and stress caused by the forfeiture of the social status. Although many studies outside of Japan have analyzed this, only a few studies in Japan have done so. There are still many points which are unclear.

Therefore, this study examines the effect of job loss on health by using the Japanese data.

Compared with previous studies, this study has three features: (1) Involuntary displacement is used as the variable for job loss to control the reverse causality between job loss and health, (2) Subjective health, subjective physical health, and subjective mental health are used as the health indicators, and (3) The analysis has been conducted by gender to clarify the difference of effect of job loss. The result of the analysis provides two findings. First, the analysis for the male employees revealed that job loss did not have a negative effect on most health indicators.

Although job loss consistently decreased the male income, it did not affect their health. Second, the analysis for the female employees revealed that job loss did not have a negative effect on the subjective health and subjective mental health. Conversely, subjective physical health was observed to be improved after two and three years of job loss. In this regard, the increase of the time spent to exercise is considered to have an effect.

JEL Classification Number：J32, J63, J64
Key Words：Job loss, Health, Propensity Score Matching

Empirical Analysis of VFM and Contract Structures in PFI Projects:an Analysis of PFI Projects in Japan

By Masato YODO, Hirokazu MIZOBATA, and Yusuke HAYASHIDA

Abstract

The purpose of this study is to investigate whether the Value for Money (VFM) of PFI projects depends on the fields and the contractual structures of the projects from the perspective of the incomplete contract theory. Recent research on incomplete contracts indicates that project fields and property rights of the facilities influence contractor incentives. Using data from 312 projects implemented in Japan by the end of March 2014, we show that the private contractors of these projects could attain higher VFM in water filtration and sewage business by adopting a BOT (Build-Operate-Transfer) contract. In contrast, in public facility construction and management projects, the contractors could achieve better results in VFM under a BTO (Build-Transfer-Operate) contract. In addition, we simulate the total VFM choosing desirable contractual structures for each project and find that the simulated VFM is approximately 40 billion yen higher than that in the actual contract. These results imply that the contractual structures play an important role in PFI projects. Specifically, to obtain higher benefits for the PFI, the type of contractual structures (BOT or BTO) requires careful selection depending on the field of each project.

JEL Classification Number: D86, H54, H57
Key Words: PFI, VFM, Incomplete Contract Theory, BTO, BOT

IS GDP STILL MEASURED CORRECTLY IN AN ERA OF DIGITALISATION?

By　Nadim AHMAD and Paul SCHREYER

ESRI International Conference 2016“Aging in Japan:The Impact of the Retirement of Japan’s Baby Boomers”

Economic and Social Research Institute

On the Survey of Management Practices in Japan

Shigeru　SUGIHARA