Gender Gap Clouds the Future for Japan

By Laura D'andrea Tyson | International Herald Tribune, August 26, 2013 | Go to article overview

Gender Gap Clouds the Future for Japan


Laura D'andrea Tyson, International Herald Tribune


Japan needs to expand its work force, which is shrinking rapidly. The International Monetary Fund estimates that Japan's working-age population will fall almost 40 percent by 2050.

Among economists (most of whom are male), there is a tendency to treat diversity and gender equality as "soft" issues -- worthy social goals perhaps, but secondary to the real business of economic growth, job creation and productivity.

But those soft issues have jumped to the top of the long-term growth agenda in Japan, where Prime Minister Shinzo Abe is working to shake the nation out of its 20-year deflationary slump.

So far, the world's attention has focused on Mr. Abe's bold macroeconomic policies to lift demand and growth in the short run. But in a departure from tradition, he is also championing changes to expand economic opportunities for women.

Mr. Abe believes in numerical targets, and he has established several of them to increase the participation and advancement of women in the workplace. He wants to eliminate day care waiting lists by creating 200,000 new day care openings in authorized public facilities by 2015, with another 200,000 by 2017. He wants businesses to double their child-care leave to three years. He wants 30 percent of leadership positions in government and business to be held by women by 2020. He is calling on Japanese corporations to appoint at least one woman to their boards. And he is considering changes in tax laws that discourage mothers from working and new training subsidies to help them return to the workplace following child-care leave.

Those initiatives are not motivated by softhearted political correctness but by hardheaded economic logic. Japan needs to expand its work force, which is shrinking rapidly as a result of a sagging birth rate and an aging population. The International Monetary Fund estimates that Japan's working-age population will fall almost 40 percent by 2050. The share of citizens older than 65 is expected to jump to 38 percent in 2050 -- when the ratio of the working population to the elderly population will be one to one -- from 24 percent in 2012.

"Japan is growing older faster than anywhere else in the world," the I.M.F. reported. Unless the nation can shore up its work force, it faces a long-term drag on economic growth at a time of soaring obligations for old-age entitlements.

Japan has one of the largest gender gaps in the world. Even though women are highly educated -- indeed, the university enrollment rate for 18-year-old females now exceeds that for 18- year-old males -- the female employment rate is about 25 percentage points lower than the rate for men, and ranks among the lowest in the developed countries.

Japan also has the largest gender pay gap of any country in the Organization for Economic Cooperation and Development, a group of free-market democracies, with the exception of South Korea. On average, Japanese women earn about 72 percent of the compensation of men for equivalent jobs. The gender pay gap rises during childbearing and child-rearing years indicating a "motherhood pay penalty." That penalty is larger in Japan than in any other O.E.C.D. country, including South Korea.

In the 2012 Global Gender Gap Report of the World Economic Forum, Japan ranked near the bottom -- 102 out of 135 countries -- on an index measuring gender parity in economic participation and opportunity. Japan has consistently had the worst ranking of any developed economy on this index since it was introduced in 2006. …

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