WP Global Economy 2016.04.28
This chapter surveyed the literature on income distribution, focusing on the research on the prewar period. From the literature, it has been established that the prewar Japanese society exhibited high income inequality and that the inequality increased over time. This evidence is consistent with the findings on the functional distribution of income, which indicated that the capital share was increasing in Japan in this period. In addition, this chapter expanded on the existing research by using a new individual-level data set to explore the relationship between assets and income. It was found that a substantial part of the income of the core top income earners was from their assets.