Cultural constraints on rising income inequality: A U.S.–Japan comparison

Prior research has identified fundamental cultural and normative concepts—including wa, enryo, giri, and amae—that are typically argued to be integral to Japanese society. We advance this line of research by discussing how these traditional cultural concepts may influence labor market relations and thereby constrain the degree of income inequality in Japan relative to the U.S. Collectivist cultural attitudes are embedded in Japanese work organization, and are naturally inherited social constraints when compared to more unbridled labor market relations of the “New Economy” in the U.S. While studies of rising inequality in the U.S. and Europe consider how governmental policies impinge upon market forces in order to moderate labor market outcomes, our analysis suggests how culture may sometimes directly constrain income inequality without imposing legal regulations or instituting official programs.