Regional Gap in Europe, US, andJapan
Ryoichi Imai

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UK Referendum on EU• On June 24, 2016, the UK people decided to leave the EU in
the national referendum.
• Media reports that the majority of UK people has been
complaining about the social burden caused by theincreasing immigrants from the EU nations on• Medical care,• school education, and• social welfare service,.

• This slide considers the economic gaps that reside within EU,US, and Japan.
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GDP per capita 2021 IMF of European countries• https://en.wikipedia.org/wiki/List_of_sovereign_states_in_Europe_by_G
DP_(nominal)_per_capita• GDP per capita is the highest in Luxemburg (138K$).
• People in Switzerland, Ireland, Norway, and Iceland earn more then
$70,000.
• Nominal GDP per capita is more than $45,000 in the leading countries
such as UK and Germany.
• People in Estonia, Czech, Portugal, Poland, and Hungary earn income
less than $27,000.
• Poorest countries are Moldova, Kosovo, and Ukraine. Their GDP percapita is around $4,000.
• The largest gap within Europe is more than 10 times or more.
3Japan 2017
• Prefectural income per capita• ¥5.47 million for Tokyo (to be excluded)• ¥3.38 million for Shizuoka• ¥2.34 million for Okinawa• https://ja.wikipedia.org/wiki/%E7%9C%8C%E6%B0%91%E7%B5%8C%E6%B8%88%E8%A8%88%E7%AE%97• Prefectural income is gross prefectural income minus rent.
• Prefectural income gap in Japan is smaller than in Europe.
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Japan’s Reginal
Gap (GDP percapita, lifeexpectancy) is
the smallest inthe WorldOECD
https://read.oecdilibrary.org/urban-rural-andregional-development/oecdregional-outlook2016_9789264260245en#page230

5Investment• In the postwar era, Japan’s government took a policy
to invest in rural areas remote from Tokyo to reduce
capital gap between Tokyo and rural areas.
• Productivity Convergence across Prefectures in Postwar Japan(RIETI)• The EU government should have taken a similar policy
to enable those peripheral nations to take off forindustrialization.
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America 2018
• https://en.wikipedia.org/wiki/List_of_U.S._states_and_territories_by_GDP• GDP per capita in 2021 dollars is the highest in New York,
Massachusetts, and Washington, California, Connecticut,
except for DC.
• GDP per capita of the state of NY is $93K, while it is $42K ofthe state of Mississippi.
• The output gap is around twice.
• Contrary to the common image, the domestic income gap in
US is smaller than Europe.

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Price Level Gap in Europe• In Euro zone, price level gap is huge in 2015.
• Switzerland 160• UK 130• Germany 100• Portugal 80• Poland 50• College students can save accommodation costs by commuting
weekly from Poland to London by flight, like Tuesday (in) and Friday(out).

8Price Level Gap in Japan• Japan’s prefectural CPI gap across prefectures (2007) is small.
• Tokyo 108• Osaka 102• Fukuoka 98• Okinawa 91• Japan’s apartment rent gap across prefecture (2013) is much larger.
• Tokyo 78• Osaka 54• Fukuoka 47• Aomori 37
9Why EU does not work well?
• In Japan and US, the regional gap remains less than twice, suggestingthat the government spends special efforts to reduce regional
infrastructure gap.
• In Europe, there still remains a large income gap between nations,which seems to create too many immigrants from the peripheral to
the leading states such as UK and Germany.

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Supplement: Immigrants in UK• Before EU started, UK
belongs to a group ofnations with few
immigrants (8%).
• However, since 1999,
the population ofimmigrants hasincreased to 12%.

http://www2.ttcn.ne.jp/honkawa/1171.html

11Why quality decline?
• Media says that people voted for Leave mainly because the quality ofhealthcare and education has been reduced by increasing immigrants,• while other authors say that quality decline was mainly caused by thebudget cut by the Conservative government.
• The UK birth rate seems to turn to increase in 2002, when the Eurobills started to circulate.
• The quality decline might be caused mainly by the increasing childpopulation.

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Too many immigrants?
• When UK returned Hong Kong to China in 1997, it did not grant thefull UK citizenship to all the residents even if they wanted it.
• The population of Hong Kong then was 6 million.

• The population of UK in 2015 is 65 millions.
• The increase of immigrants to UK since 1999 was around 2.6 millions,
4% of the current population of UK.
• Is it large enough to explain the too much demand for healthcare andschooling in UK?

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