Fumio Ohtake (Osaka University)

1. 7th Global NTA Meeting: Population Aging and the Generational Economy June 11-12, 2010 Poverty and Inequality in Japan Fumio Ohtake (Osaka University)

2. Background of Research: Public Attention to Income Gap and Poverty Backgrounds of Research (1) : Public attention to Income Gap (1) in a governmental survey, a rising percentage of people report the perception of economic inequality; (２) the widening income gap in society was debated in the Diet in 2006. (3) Japanese government published the poverty rate in 2009

3. Figure 1: Perception of Economic Inequality National Survey on Lifestyle Preferences（Cabinet Office）

4. Objectives of Research • Facts on income inequality in Japan based on the time series of the Gini coefficient • Reasons for the changes in Japan’s income inequality • Change of Poverty Rate by Age groups

5. Figure 2. Income Inequality in Japan: the Gini Coefficients from Various Data

6. Figure 3. Changes of Share of Households by Number of Household Member

7. Figure 4: Gini Coefficient: Household Income

8. Figure 5. The Gini Coefficients of Before-tax Income by Age of Household Heads Equivalent Scaled Income

9. Figure 6. Age Distribution of Household Heads

10. Figure 7. Gini Coefficient of Household Consumption by Age group

11. Figure 8. Gini Coefficient: Personal Income

12. Are the elderly the economically disadvantaged people? (1) • The public pension system, the health insurance system, the long-term care insurance system solve the problem of elderly people's poverty • The livelihood protection system • The elderly people have a higher poverty rate than any other age group • The average living standard of the elderly is not always low • The average amount of financial assets held by age bracket is the largest among the aged.

13. Are the elderly the economically disadvantaged people? (2) • The income distribution in Japan: the level of income inequality of elderly people is higher than that of other age groups. • The poverty rate of the elderly has not risen in the 2000s. • The poverty rate increased in age groups of late 20s, 30s and under 5 . • The number of elderly people has increased itself and thus the ratio of the aged to poor people is on the rise.

14. Poverty of elderly people seen from the receipt of public assistance • Fig. 9. Number of households receiving public assistance by household category

15. Fig. 10: Ratio of households receiving public assistance by household category

16. Figure11: Ratio of Households Receiving Public Assistance By Household Type

17. Income and consumption of elderly people • The average before-tax real income per person "National Survey of Family Income and Expenditure“ • \3.30 million in 1984 • \3.85 million in 1989 • \4.23 million in 1994 • \4.04 million in 1999 • \3.91 million in 2004.

18. Figure 12: Change of the Average Before-Tax Income by Age group

19. Figure 13: Change of the Average Disposable Income bye Age Group

20. Fig. 14: Trend of the average real consumption expenditure by age group

21. Fig. 15: Trend of the average real consumption expenditure for non-durable consumer goods

22. Fig. 16: Trend of real financial assets held by age group

23. Fig. 17: Gini Coefficient: Personal Before-Tax Income by Age Group

24. Fig. 18: Gini Coefficient: Personal Consumption by Age Group

25. Fig. 19: Gini Coefficient: Financial Asset

26. Fig. 20: Poverty Rate: NSFIE

27. Fig. 21: Poverty Rate: IRS

28. Fig. 22: Poverty Rate from the Disposable Income by Age Group: NSFIE

29. Fig. 23: Poverty Rate from Disposable Income by Age Group: SIR

30. Fig. 24: Poverty Rates from Consumption by Age Group: NSFIE

31. Fig. 25: Poverty Rates from Consumption by Age Group: SIR

32. Fig. 26: Distribution of Poor People from Disposable Income: NSFIE

33. Fig. 27: Distribution of Poor People from Consumption by Age Group

34. Conclusion (1) • One characteristic in Japan is that due to a high labor participation rate of the elderly, there are large income gaps within the elderly group. • Elderly people in Japan are also characterized by the fact that they have a large amount of financial assets on average. • Their poverty rate has lowered since the mid-1980s but is still higher than that of other age groups.

35. Conclusion (2) • Poverty rates in their twenties and thirties and those under ten increased recently. • Because changes in population structure have been large and the ratio of elderly people to the population has rapidly been increasing, the percentage of the elderly to the poor is on the rise.

36. Thank you