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Estimating economic unfairness in Japan and policies toward fairness

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  • Sayaka Sakoda

    (Japan Society for the Promotion of Science and Kyoto University)

Abstract

Pre-tax income is affected by non-responsibility factors beyond an individual’s control and responsibility factors beyond an individual’s control; they could be defined as “situational” and “effort” valuables. If decreased pre-tax income derives from factors not attributable to individuals, such decline should be socially compensated. This debate is known as “responsibility-sensitive egalitarian theory”, which has been applied to empirical analysis in economics to identify causes of inequality. A wage gap between men and women has been observed in Japan for a long time; however, the gender variable has rarely been considered. Based on the “responsible egalitarian theory”, we estimate inequality using panel data from the Japanese Community Survey of Living Conditions (2010–2013), focusing on (1) gender and (2) age. This paper conduct three analyses: firstly, this paper estimate labour income using the panel data and examine the effects of situational and effort variables. Secondly, this paper considers how gender, regional differences, and educational achievement differ by using the results to estimate fair income. When we show the fair income difference in terms of the current age group, we find a difference in fair income between men and women and that the deviation from fair income to current income is more considerable for women. Lastly, by constructing a differenced based Lorenz curve, it seems that the type of unfairness differs by gender.

Suggested Citation

  • Sayaka Sakoda, 2022. "Estimating economic unfairness in Japan and policies toward fairness," International Journal of Economic Policy Studies, Springer, vol. 16(1), pages 85-111, February.
    • Handle: RePEc:spr:ijoeps:v:16:y:2022:i:1:d:10.1007_s42495-021-00070-5
    DOI: 10.1007/s42495-021-00070-5
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    More about this item

    Keywords

    Economic unfairness; Equality of opportunity; Inequality; Panel data analysis; Economic policy;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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