Impact of Inter-Generational Transfer through Tax and Social Security Systems on Income Inequality in Japan

In this study, microdata from the Comprehensive Survey of Living Conditions (CSLC) is used to investigate how inter-generational transfer through tax and social security systems affects income inequality in Japan. To provide accurate income inequality measures, sampling weights are created using microdata from the Population Census. To shed light on income inequality from a broad perspective, four inequality measures are provided based on three definitions of income. It was found that income inequality measures tend to be high when adjusted with our sampling weights. Additionally, it was also found that tax and social security systems not only lower the level of income inequality but also slow the pace of the increase.