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Vol. 65, No. 1, pp. 86-93 (2014)

“Widening Income Inequality and Reexamining the Effect of Population Aging”
Masao Yamaguchi (Faculty of Economics, Osaka University of Economics)

By using anonymous data from the National Survey of Family Income and Expenditure, this study reveals the features of changes in equivalent income inequality during 1989-2004 of Japanese households consisting of more than two persons by means of GI curve and MLD decomposition. It also indicates how an aging population affects income inequality by considering the division of age group of households into those with the household head above 60 of age and those below.
Previous studies showed that widening income inequality is mainly caused by population aging; however, they could not identify the contents of population aging. The present study's analyses results show that the widening income inequality during 1989-1994 and 1994-1999 was owing to the increase in the proportion of those above 60 years of age, especially among non-workers, but that during 1999-2004, it was mainly because of the increase in the within-group inequality among each age group. Moreover, the expanding income inequality since 1994 among those in the below 60 age group was not caused by population aging but by an increase in within-group inequality.