A MULTI-SECTORAL ECONOMETRIC-MODEL DIVIDED BY SOCIAL STRATA OF THE JAPANESE ECONOMY

Abstract

It is necessary, in our opinion, to introduce a social strata analysis into the econometric-model of the Japanese economy for the following reasons. Firstly, all economic agents are divided in various social classes and social strata which have different social characteristics. The population is composed of many social strata by differences of ages, sexes, occupations, industries, incomes, assets, conditions of houses, regions, etc., and the differences between these social groups are gradually increasing in recent years. Moreover, the economic structure in Japan can be considered dual: big businesses vs small businesses, and export-oriented industries (automobile, electronics, etc.) vs traditional declining ones (steel, mining, textile, etc.). The rapid structural changes which we have experienced in the industrial relations after 1975 are accelerating the change in the composition of social strata. Therefore, the macro econometric-model without any social strata division is not sufficiently realistic today. Secondly, all economic policies have different effects between the different social strata. So, in order to examine closely the significance of various policies, especially of so-called welfare-oriented policies, on the different social groups, it is very useful to adopt the point of view of social strata analysis. We can compare the effects of actual policies and those of alternative policies which aim at an increase in employment, the improved welfare, amelioration of conditions of small businesses, protection of the natural environment and stable growth in favor of people's lives, by the construction and simulation of the econometric-model divided by social strata.