The Employment of Wives and Income Inequality in Japan

The objective of this paper is to examine the kind of impact a wife’s employment has upon income inequality among households, focusing upon employee households. Along with changes in household composition (the spread of the nuclear family and increasing numbers of single-parent households), a wife’s employment pattern and her income impact upon the changes in income disparity among households in the same age-bracket

The Equal Employment Opportunity Law was enacted in 1986 and revised in 1999. Its introduction is one of main factors that changed women’s labor force participation. The employment rate of women has risen since bottoming out in the mid-1970s, and the numbers of women working as employees, including married women, have been increasing. Scrutiny of workers’ households in the Labour Force Survey show that ‘dual-income households’ have come to account for half of all households since the beginning of the 1990s, and from the 1990s onwards, ‘dual-income households’ have outstripped ‘full-time-housewife households’. Nowadays, ‘dual-income households’ accounts 60% of workers’ households. These social circumstances imply the enlargement of wives’ role to income inequality between households.

Using the Employment Status Survey data, the official statistics in Japan, from the seven waves of 1982, 1987, 1992, 1997, 2002, 2007 and 2012, we analyze two aspects of wives’ contribution to household income. First, we reveal the change of wives’ employment ratio based on husbands’ income ranks. We expect that a difference between ranks has decreased during three decades. Second, we analyze the contribution of wives’ income to income inequality between households based on the decomposition of the Gini coefficient of the couple’s combined income into that of husbands’ and that of wives’. Based on these analyses, we characterize the change of wives’ role in income inequality in Japan.