Inequality Dynamics in Japan, 1981-2021

This paper examines the path of economic inequality in Japan spanning four decades (1981-2021) using the Family Income and Expenditure Survey. Over this period, inequality in earnings, disposable income, and consumption has widened. Earnings inequality, measured by the Gini coefficient, exhibited a non-linear in- crease from 0.24 to 0.29, with a significant rise in the 1980s and early 2000s. Conversely, disposable income showed a modest downward trend since the mid- 2010s. Despite this, consumption inequality continued to rise moderately, indicat- ing a divergence in the dynamics of disposable income and consumption inequality. Analysis from a life cycle perspective confirms the different shapes of age profiles for income and consumption inequality. Our findings also highlight substantial variations in age-specific inequality across different consumption items.