I was recently asked to give a speech at a women's college. I spoke on the topic of economic restructuring, a presentation that, in one form or another, I have made over thirty times in the United States. I told the young women that the future of the Japanese labor force rested on their shoulders, which I believe is true. I encouraged them to be ambitious. I would like to share some of data on Japanese women's participation in the labor force with you here. I think you will find them quite interesting as well.
Is there a shortage of worker's in Japan's "aging society"? The short answer is not really, not when the nature of women's participation in the labor force changes, as it is doing even now. METI has estimated an increase of several million in the work force when the so-called "M-curve" of the women's labor participation rate changes or shapes up to something more closely resembling that of Nordic countries. (Chart 1a)
In addition, senior citizens want to work, (Chart 1b) which will provide several million more workers. Recently, METI has proposed to eliminate any age requirements from recruiting rules in an attempt to support the integration of seniors into the workforce.
Altogether, METI estimates a potential increase of about 10 million in the labor force which could at least postpone a labor-shortage problem by more than 30 years without a substantial increase in immigrant workers. (Chart 2) The issue of immigrant labor in Japan, as in every country, can be controversial, and while it may be a related discussion, it deserves to be addressed more thoroughly at a later time.
At the moment, one way that Japan's "M-curve" of women's labor force participation differs significantly from that of other leading nations is in the re-entry into the work force of educated women after childbirth. This phenomenon is much less common in Japan. But a higher women's labor participation rate doesn't lower the birthrate, and may in fact increase it, as the following OECD statistics show. (Chart 3).
One serious group of obstacles Japan faces, which of course will take time to overcome, are the fundamental improvements to infrastructure that must occur to facilitate the full participation of women and seniors in the work force. There are issues of pension portability, the tradition of forced retirement, questions of equal pay, spouse tax treatment, day care facilities-- a host of issues that have far-reaching domestic social policy implications. The US has also had to, and is no doubt still in the process of, addressing many of these same concerns.
Encouraging women to enter more fully into the labor force will increase competition for jobs at a time when Japan's unemployment rate is at a post-war high; salaries for male workers could suffer as a result. But two working family members instead of one, which is still more or less the norm in Japan, means more income for the household. Also, it could encourage the sharing of housekeeping chores and child-rearing, tasks which are really much more tiring than office work, as a famous female ex-MITI official once said.
One of our recent speakers, Goldman Sachs Japan Chief Strategist Kathy Matsui, remarked that she was surprised to discover it is not only Japanese labor conventions that keep women from participating more fully in the workforce, but a tangible lack of career aspirations among Japanese women themselves. In her investigations into the economic implications of Japanese women in the labor force, an area that she calls "Womanomics," she notes that fostering career ambition is something that must be addressed as well.
It is difficult to say whether this can, in fact, be addressed through policy: it may be an educational, or even simply a child-rearing, issue. But ambitiousness and career aspirations are very much a desirable characteristic in the upcoming generation of Japanese young women. There is no doubt that they can make a significant contribution to the economic restructuring of Japan, something that we, as well as all of you outside of Japan, are anxious to see emerge.
Author and Editor in Chief, Nobuo Tanaka
Executive Director, Research Institute of Economy, Trade and Industry, M.E.T.I.
e-mail: tanaka-nobuo@rieti.go.jp
tel: 03-3501-1362 fax: 03-3501-8391
The opinions expressed or implied in this paper are solely those of the author, and do not necessarily represent the views of the Ministry of Economy, Trade and Industry (METI), or of the Research Institute of Economy, Trade and Industry (RIETI).
