By Matt Goodman
Japan’s demographic trends are grim, but the Japanese make it harder on themselves by not better using the people they have. Women in particular are famously underutilized. Some 60 percent of women quit the workforce after giving birth. Japan also has one of the lowest ratios of women in senior management positions in the world (7 percent, versus 20 percent in the United States and 50 percent in China).
In part this reflects social mores that will be difficult to change quickly. But policy could give a useful nudge.
According to a recent OECD study, Japan’s gender pay gap is the second highest in the advanced world, rising from 15 percent for 25-29 year olds to around 40 percent for workers over 40. Women who return to work after childbirth typically end up in “non-regular” employment with lower wages and benefits; nearly 55 percent of female workers are non-regular, versus fewer than 20 percent of male workers.
Moreover, the tax system discourages dependent spouses from earning substantial wages. And although the government has worked to improve childcare facilities for working women, these remain sub-standard by international comparison.
Matthew P. Goodman holds the William E. Simon Chair in Political Economy at CSIS, with particular emphasis on Northeast Asia.