Japanese Gender Inequality and the Demographic Time Bomb – The Costs of Hard Work

Japan consistently ranks as one of the most developed countries in the world, however it may be a surprise to many that large and persistent gender inequalities still exist. Although Japan has seen increased levels of female education participation this has not translated into gender equality in the labour market. The country consistently ranks low on a number of gender equality measures. Most recently the country fell 3 places to 101st out of 135 counties in a recent survey by the World Economic Forum. The OECD reports that the gender pay gap remains high at 15% and this rises to 40% for older workers – this is the second highest rate among OECD countries. Female labour force participation sits at around 63% in comparison to 83% for men, if the current trend continues it could lead to a reduction in the size of the labour force by 10% over the next 20 years. Furthermore senior Japanese business women are a rare occurrence, the OECD shows that Japanese women only account for 3.9% of listed company board members this again ranks second lowest among OECD countries.

Such inequalities are compounding because gender equality is considered beneficial to many areas of economic development. Increasing female employment in general increases the size of the labour force and thus GDP. In addition gender inequality may lead to labour market distortions whereby men are employed in positions where women could be more productive. Recent estimates by Kathy Matsui of Goldman Sachs, finds that closing the gender employment gap could expand the Japanese workforce by 8.2 million. This she asserts could lead to a increase in Japan’s GDP of around 15%. Coupled with this some studies have found that in general women tend to save more than men. For instance Sequino and Sagrario Floro (2003) find that a one percentage point increase women’s share of the total wage bill tends to increase aggregate savings by approximately one quarter of a percentage point. This means for countries such as Japan that increased female labour force participation could lead to higher rates of saving and hence increased investment.

So what are the problems Japan faces? One of the most potent statistics is that 70% of women in Japan leave the workforce as soon as they have their first child. The ratio of Japanese mothers with children under six who work (34%) remains extremely low compared to 76% in Sweden, 61% in the US, 55% in the UK, and 53% in Germany. Matsui’s report suggests that once Japanese women leave the workforce they generally find themselves returning to limited part time employment due to increased responsibilities  She explains the “typical” lifestyle for a Japanese women is as follows;

  1.  Graduate from high school or university and find a job (average age: 18-22 years)
  2.  Get married (age: 25-29 years)
  3.  Become pregnant, then drop out of workforce in order to raise the child(ren) (age: 30-39 years) 
  4. Once the child(ren) become(s) independent, resume work (approximate age: 45+ years) 
  5. Even if work is resumed after age 45, it is typically limited to part-time employment, since by this stage either her husband’s or her own parents often begin requiring convalescent support.

A particular issue is that of lack of available and affordable daycare. For instance Tokyo government statistics show that there are more than 20,000 children waiting for daycare places in the city. In addition to this the work culture in Japan means that men tend to devote less time aiding in childcare. The graph below from Matsui’s report shows the average number of hours spend by men on household activities and childcare.

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The graph shows that on average Japanese men spend less than an hour on these combined activities. To further compound this problem only 2.63% of men take paternity leave due to the fear of losing their jobs. Such statistics show the increased pressures placed upon Japanese mothers to leave the labour market.

In addition, these issues have led to two principle problems, firstly women who are having children are not working. Secondly those that are working are  not having children. Consequently Japan now has one of the lowest birth rates in the world with 1.3 births per women and now faces the prospect of seeing its population decline by a third over the next century if trends continue.

The irony of such problems is that Japan’s famed work culture and ethic which once drove the country’s rapid development  is now partly responsible. The pressures of long hours and vigorous commitment mean that the country is now facing a demographic time bomb whilst many of its potential female workers remain under utilized. However government policy to provide more daycare centres and child bearing incentives is only one half of the solution. As a recent survey by the The Yomiuri Shimbun shows the share of Japanese who thought wives should stay at home jumped 10.3 percentage points to 51.6 percent between 2009 and 2012. The dilemma therefore is therefore not only policy problem but also a cultural issue as well.

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