Discussion Papers

Changes in Household Income Inequality over the Business Cycle:Husbands’ Earnings and Wives’ Labor Supply in Japan during the Global Financial Crisis

DP Number DP2017-003
Language 英語のみ
Date May, 2017
Author Yoshio Higuchi, Kayoko Ishii, Kazuma Sato
JEL Classification codes J11, J30, I31
Keywords Demographic Trends, Macroeconomic Effects, and Forecasts, Wages, Compensation, and Labor Cost General, General Welfare, Well-Being
Downloads PDF

This study examines how household income inequality in Japan is impacted by changes in a couple’s income and employment status after economic crises, using the Keio Household Panel Survey (KHPS). Our analysis of the periods before and after the Global Financial Crisis yields three notable findings. First, during the recession, incomes stagnated for households in the middle- and high-income brackets, with many experiencing income declines. Conversely, many low-income households saw incomes increase even during the recession, and the overall income gap may have shrunk. Second, concerning the impact of changes in the husband’s income on the wife’s employment, we show that when the husband’s income declines, the added worker effect is observed. This effect was larger in households whose income was originally low. Third, we calculate the Gini coefficient both by using only the husband’s labor income, and also with the wife’s labor income added. We find that the wife’s labor income reduced household income inequality, in particular for several years following the 2008 recession. In conclusion, when focusing only on married households, income inequality appears to shrink during economic recessions.

日本語版DP 『景気変動と世帯の所得格差 --リーマンショック下の夫の所得と妻の就業--』 経済研究(2017) 68巻 第2号