Social Capital and Income-Wealth Gap: An Empirical Analysis on Japan

抄録

This paper presents an empirical result on the relation between social capital and economic inequality in Japan based upon prefecture-by-prefecture data together with a summary of both normative and empirical studies in the past. In this study, I carried out an analysis based on a data set provided by social capital surveys of the Cabinet Office of the Japanese Government. Data on twelve elements of social capital covering social contacts, trust, and community participation by 47 prefectures are compiled. The relation between each of these twelve elements and the income/wealth gap gauged by Gini coefficients on annual household income, amount of household savings, value of real estate held by households, and the value of durable goods owned by households, are examined. The analysis shows strong inverse correlations between community participation indices and income/wealth gaps. Higher inequality is associated with lower community participation. In addition, wealth gaps are more strongly correlated with social capital elements than the income gap. Although causalities are not clear yet, these results suggest the importance of social capital in policy making related to income/wealth distributions. A widening income/wealth gap may be undesirable because it may deteriorate the quality of social capital, especially people’s daily contacts.