ESRI Discussion Paper Series No.400 Earnings, Income, and Wealth Inequality in Japan: A Long-Term Perspective, 1984-2019

Sagiri Kitao

Economic and Social Research Institute, Cabinet Office

National Graduate Institute for Policy Studies

Tomoaki Yamada

Economic and Social Research Institute, Cabinet Office

School of Commerce, Meiji University

Abstract

This study examines trends in earnings, income and wealth inequality among households in Japan from 1984 to 2019. Our findings reveal that inequality in all three domains has increased over the last decades, but due to different underlying factors. The rise in earnings and income inequality is primarily driven by demographic aging, with an increasing proportion of elderly households who typically exhibit higher inequality levels. The growth in wealth inequality is evident not only in the overall population but is particularly pronounced among the young. This trend is largely attributed to a significant rise in the number of households that possess extremely low wealth. Key factors contributing to inequality trends in Japan include aging demographics, shifts in household structure, and major macroeconomic developments such as the financial bubble period and the prolonged economic slow-down that followed.