The Factors of Income Inequality and the@Coordination between Income Distribution@Policy and Social Security
Yoshihiro KANEKO

Recently social security reform in Japan has advanced so that the relationship between its cost and benefits would be adjusted to satisfy the intergenerational equity in the rapid aging of the Japanese society. However, as several empirical studies on Japanese income distribution revealed that the expansion of income inequality has occurred since the latter half of 1980s, we re-recognized the importance of the income redistribution policy in the social security system. @In this paper, we investigate the influence of the cost and the benefits of social security by decomposing the Gini coefficient into those of total earnings, the redistributed income, taxes, social security contributions and social security benefits. Although the social security plays a role of income redistribution compared with the distribution of total earnings, the relative Gini coefficient of pension benefits and medical services tend to be larger than that of total earnings. Furthermore, the estimated result of social insurance contribution rate function suggested that it does not have any progressive structure like the individual income tax. Hence, we should reconsider the structure of cost and benefits of social security and the role of income redistribution policy so that we can achieve for the coordination between intergenerational equity and intragenerational equity in our social security system.


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