Wage Share Inequality in Japanese Manufacturing (1985-2003)
Manufacturing in Japan has been characterized by extensive subcontracting networks in which small and medium-sized firms are linked to larger-sized firms. However, since the early 1990s manufacturers of all sizes have faced a difficult economic climate that has forced them to dramatically restructure production. This paper examines the restructuring of the 1990s through an analysis of firm size-based inequalities in the wage share of manufacturing output. The Theil index, a tool often used to examine changing levels of income inequality, is adapted to explore the temporal and spatial dimensions of wage share inequality for six manufacturing firm size categories across Japan's forty-seven prefectures during the 1985 to 2003 period. The results suggest that the contributions of large (over 300 employees) and medium-sized (between 100 and 299 employees) firms changed during the late 1990s. Consequently, by 2001 regional variations in the wage share became more important for overall levels inequality than variations between firm size categories.
Keywords: Industrial Restructuring, Regional Development, Theil Index, Japan
Dr. Shawn Banasick
Assistant Professor, Geography Department, Kent State University