Wealth Accumulation and Enterpreneur-ship in Japanese Households

Research Project

Project/Area Number	09630031
Research Category	Grant-in-Aid for Scientific Research (C)
Allocation Type	Single-year Grants
Section	一般
Research Field	経済政策(含経済事情)
Research Institution	Gakushuin University
Principal Investigator	GENDA Yuji Gakushuin University, Faculty of Economics, associate professor, 経済学部, 助教授 (90245366)
Co-Investigator(Kenkyū-buntansha)	KUNITOMO Naoto The Unversity of Tokyo, Graduate school, Division of Economics, Professor, 大学院・経済学研究科, 教授 (10153313) ISHIKAWA Tsuneo The Unversity of Tokyo, Graduate school, Division of Economics, Professor, 大学院・経済学研究科, 教授 (90107483)
Project Period (FY)	1997 – 1998
Project Status	Completed (Fiscal Year 1998)
Budget Amount *help	¥3,000,000 (Direct Cost: ¥3,000,000) Fiscal Year 1998: ¥1,000,000 (Direct Cost: ¥1,000,000) Fiscal Year 1997: ¥2,000,000 (Direct Cost: ¥2,000,000)
Keywords	Self-employment / wealth accumulation / income distribution / 所得文配
Research Abstract	Self-employed workers have been decreasing in Japan since the 1980s. We research the reasons for the decrease using micro data of the Family Expenditure Survey 1989 and 1994. There are two important conditions for becoming self-employed ; one is the accumulation of experience and intensity of riskattitude by aging, that is called the aging effect, and the other is liquidity constraints in capital market, that is the wealth effect : We empirically examine how these two effects contributed to declining the self-employment rates from 1989 to 1994. We found as the results that the aging effect accounted for a little less than 40% of its decline and almost 20% could be explained by the wealth effect. And we also attempt to find the facts of income accumulation among self-employed households, estimating the earnings function of self-employment. Then, in order to control for sample selection bias, we estimate it using the Heckman's estimation model. The results show that the age of households tend to increase earnings through accumulation of experience and know-how. However, the income increase with aging was clearly weakened from 1989 to 1994, strengthening the risk-averse attitude. And it can be convinced that marginal return of wealth accumulation for earnings was positive, and the earning differentials by wealth have been growing among the self-employed. The liquidity constraint that has been getting tight has worsened the self-employed income distribution, so that it has becoming much more difficult to open business and continue to self-employment. These findings indicate that the current Japanese economy have been moving toward the "rentier" economy that John Maynard Keynes worried about the British economy in the past.