Earnings Inequality Analysis Using Administrative Tax Data in Japan

This paper analyzes the trends in income inequality in Japan using administrative data collected by local governments, covering approximately 5.5 million individuals across 24 municipalities. By leveraging a large-scale panel of administrative tax records, which includes both high- and low-income individuals, who are often underrepresented in traditional survey data, we conduct a detailed analysis of earnings inequality, its evolution over time, and its life-cycle patterns. Based on data from 2011 to 2023, we find that despite a temporary decline in incomes during the COVID-19 pandemic, many municipalities experienced a trend toward narrowing inequality. The analysis also reveals that income levels and dispersion increase with age, and that substantial regional disparities persist. This study demonstrates administrative data’s potential as a valuable resource for research on income inequality in Japan.