December 17, 2014

Japanese economy remains male-dominated

Despite Prime Minister Shinzo Abe’s efforts, Japan’s legislative bodies and workforce remain unequally composed between men and women.

The number of female lawmakers rose from 38 to 45 in the most recent round of elections in December. However, this still equates to just 9% of all parliament members, which is far below the Prime Minister’s target of having 30% of women in leadership roles by 2020. In this year’s Global Gender Gap report by the World Economic Forum, Japan ranked 104th out of 142 countries, also below average.

The increasing longevity of the Japanese population is also set to cause issues. Japanese women have an average life expectancy of 87 years, the longest in the world. Support for the retired population is becoming an ever greater burden for the country’s working age population, who must also fund the nation’s gigantic public debt which equates to 200% of GDP.

Marek Góra has written that: "Pension systems need to be redesigned to accommodate demographic changes. Postponing adjustment simply increases the economic and social costs."

With an average fertility rate of 1.3 children per woman, the proportion of the population that is retired is growing and the proportion of working age is shrinking drastically. The population began falling in 2004, and at its current trajectory could be reduced by two thirds by 2110.

Japanese women often delay or reject marriage because cultural norms require them to take a restricted role in society as wives. According to The Economist, "for a woman, being both employed and married is tough in Asia." The effective removal of women from the work force upon marriage means that many productive workers are removed from an already shrinking tax base.

Writing about ways of combating declining fertility in Central and Eastern Europe, Elizabeth Brainerd concludes that "the most effective approach is likely to combine well-crafted pronatalist policies with openness to increased migration." Japan has avoided using migration as a method of demographic renewal, despite calls for reform from prominent business leaders. Brainerd also acknowledges that pronatalist policies are unlikely to counter social changes such as new education and work opportunities for women.

Meanwhile, in an article on equal pay legislation and outcomes, Solomon W. Polachek notes that accumulated human capital narrows the gender wage gap, and that economic policies that promote greater lifetime work for women can reduce the gender wage gap further.

Read more here.

Related articles:
Redesigning pension systems, by Marek Góra
Can government policies reverse undesirable declines in fertility? by Elizabeth Brainerd
Equal pay legislation and the gender pay gap, by Solomon W. Polachek