Note 1-2

2 Hattori and Maeda (2000) pointed out that per capita wages are hovering at a high level due to the aging of the population and an increasing number of employees with higher education. In Nishizaki and Sugo (2001) it is pointed out that labor share tends to rise in the long term in Japan with rises in labor productivity due to the capital deepening because the elasticity of substitution of labor and capital is below 1. In Figure 1-1-2 it is possible to see that recently there has been a significant decline in labor share, which is the compensation of employees (SNA basis) divided by nominal GDP. This is a result of the differences, such as the fact that compensation of employees includes the public sector and the financial sector, which are not included in Financial Statements Statistics of Corporations by Industry.