Low inequality with low redistribution?An analysis of income distribution in Japan, SouthKorea and Taiwan compared to Britain

This article is a comparative analysis of the sources of income inequalityin four countries, namely Japan, South Korea, Taiwan and the UnitedKingdom. It relies upon decompositions of inequality measures bypopulation groups and income sources (except for Japan because of datalimitations). According to national family income and expendituresurveys, income inequality in the three Asian countries is about averageamong industrialised countries, and less severe than in Britain. Thefactors influencing income inequality are very different between thethree Asian countries on the one hand, and Britain on the other. Whilethey do not differ very much in terms of inequality of earnings, the mostequalising factor in the former countries is the favourable distribution ofwork across households, compared to social security in the latter. Publictransfers are still very underdeveloped in Korea and Taiwan, althoughrecent legislation will dramatically change that in the coming decades,while the Japanese social security system does not generate muchvertical redistribution. However, income redistribution takes placewithin the family cell between people with and without work.Compared to the British situation, there are very few worklesshouseholds in the three Asian countries, thanks to their different coresidenceand labour participation patterns.[...]