【Aging, safety net and fiscal crisis in Japan】No.279:Total income of Tokyo’s residents decreased despite an increase in the population

On September 1st, 2020, the Cabinet Office announced the estimation results of the gross domestic product and income of each prefecture in the fiscal year 2017. The prefectural income is the sum of employee compensation, property income, and corporate income. Since the estimation method is slightly different than for the national income, the total prefectural income does not match the national income. In spite of this, prefectural income statistics are a useful source of information when considering the regional distribution of income.

As shown in Table 1, the total prefectural income increased by 0.7% from JPY 415,581 billion in 2007 to JPY 418,620 billion in 2017, while Japan’s population decreased by 1.0%. Some interesting points can be made when considering these figures per prefecture. First, the total income of Tokyo’s residents decreased by 1.7% from JPY 75,728 billion to JPY 74,473 billion. Correcting the concentration of wealth in Tokyo is a major political issue, and a concrete measure to revitalize the local economy is one of the focal points of competition between the three candidates for Abe’s succession. Although everyone believed that wealth was concentrated in Tokyo based on a 6.8% increase in Tokyo’s population between 2007 and 2017, the total income of Tokyo’s residents has decreased due to a per capita income decline of 7.9% over the same period. Second, the per capita income in prefectures where the population fell significantly has increased. For example, in Akita Prefecture, the per capita income increased by 16.8%, while the population decreased by 11.2%. Third, there is a 2.3-fold difference in per capita income between the highest (Tokyo: JPY 5,426,000 = US$ 51,193) and the lowest (Okinawa: JPY 2,349,000 = US$ 22,159) prefectures.

Table 1 Per capita income by prefecture

Source: Cabinet Office