Institutions, Deindustrialization, and Functional Income Distribution in Japan

  • Kyoji Fukao
  • Cristiano PeruginiEmail author
Part of the ADB Institute Series on Development Economics book series (ADBISDE)


We investigate the long-term drivers of the labor share in Japan using data from the Japanese Industrial Productivity database from 1970 to 2012. The descriptive and econometric results indicate that the decline in the labor share observed in Japan during the period of analysis was highly concentrated in the low-knowledge-intensity sectors, the employment share of which has increased remarkably. These sectors also experienced a strong increase in non-regular workers, who constitute a secondary segment of the labor market in Japan, characterized by low wages and very limited union coverage. The low level of protection of this group of workers and the increase in market power concentration have probably contributed to reducing the bargaining power of labor vis-à-vis employers and, consequently, the labor share.


Labor share Non-regular work Markup Japan 

JEL Classification

E25 J30 L11 O14 


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Copyright information

© Asian Development Bank Institute 2019

Authors and Affiliations

  1. 1.Institute of Economic ResearchHitotsubashi UniversityTokyoJapan
  2. 2.Department of EconomicsUniversity of PerugiaPerugiaItaly

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