2005/02 Research & Review

Why Do Government Policies Fail to Promote Female Participation?

Faculty Fellow, RIETI

Societal factors posing an obstacle to the participation of women

We have been working on a research project studying policy measures to accelerate female participation in workforce for about a year and half. Today, we would like to present the findings of our research and seek your opinions, including honest criticism. One of major characteristics of our research project is its interdisciplinary approach. Not only economists but also those specialized in sociology and pedagogy combined their expertise to find out why policy measures designed to promote female participation in the labor force are not working in Japan and what must be done to change the situation. It is from this perspective that we conducted our research, which we present here today.

In our project, we have studied this issue from various aspects to identify obstacles to female labor force participation. We begin by presenting some facts and figures we have uncovered in our study. We then discuss possible policy measures based on these facts and figures, which is the main objective of our project. Now, let me talk about some facts that have been confirmed statistically.

The first point deals with the issue of discrimination. When we economists analyze the differences between men and women, we use two variables. First, we are interested in the size of the wage gap between men and women. Second, we are interested in the promotion gap between men and women. The extent of the gap between male and female employees in career promotion is of the greatest interest from the standpoint of economics, so let me briefly introduce some facts about it.

(1) Gender wage gap
Figure 1: Composition of wage earners by wage class

From Figure 1, we can get a rough picture of the wage levels of women and men. When we look at the wage composition for female and male workers, we can see the overall wage levels for men are higher than those for women, and that low-wage earners are mostly women. These observations can be interpreted in various ways. For instance, education is the most closely monitored variable in other countries, which focuses on differences in education between men and women as a factor leading to the wage gap. Accordingly, one possible interpretation is that men receive relatively higher wages because the percentage of those who have a university education is higher for men than for women. Meanwhile, where it is recognized that women have fewer opportunities for promotion in the workplace, for instance, if we can point to the fact that a substantial number of male employees are promoted to the post of section or department chief whereas female employees hardly reach that level, we can form another hypothesis, namely, that the gender wage gap is attributable to the promotion gap. The third possibility is to look to differences in the work patterns between men and women to explain the wage gap. When we focus on full-time versus part-time employees, we can see that the percentage of part-time employees as a share of the total workforce is extremely high for women. Indeed, about one out of two female workers is a part-timer in Japan, whereas most male workers are full-timers. Such differences in work patterns (i.e., whether they work full time or part time) lead to wage gaps. Hourly wages for part-time employees are lower than those for full-time employees. Thus, taking hourly wage rates as a variable, the extremely high percentage of part-timers in the total female workforce as compared that for the male workforce, naturally results in a substantial gender-based wage gap.

(2) Promotion gap
Very few women hold managerial positions in private-sector companies in Japan, with only 1%-2% of female employees serving as bucho (department chief), 3%-4% serving as kacho (section chief), and 8%-9% serving as kakaricho (subsection chief). This is the reality in Japan. Why this is happening is a matter of major interest. For instance, just how many working women are on the so-called career track, a career path leading to the posts of subsection, section or department chief? Thus, we need to ask whether women and men are equally represented on the career track in the first place, which is another point of our interest.

As you are well aware, about 20 years ago, many Japanese companies adopted a personnel management system that classifies employees into two groups, sogoshoku (comprehensive task) positions and ippanshoku (general task) positions. Specifically, employees assigned to sogoshoku positions are on the career track - those for whom there is a possibility of promotion or those who are on a career ladder. Employees assigned to ippanshoku positions, on the other hand, perform only subordinate tasks. When we look at the male-to-female ratio in each group of employees, we can see that the distinction between the sogoshoku and the ippanshoku employees in Japanese companies is gender-based and that ippanshoku employees are almost exclusively female. The typical practice among Japanese companies has been to recruit and hire male employees almost exclusively as staff for sogoshoku positions. In other words, these companies have never intended to promote women to management, inferring that those recruited for the ippanshoku positions have no interest in being promoted. From this we can derive another interpretation: Japanese companies traditionally had no intention to promote women to management posts. The distinction between the sogoshoku and ippanshoku positions is gradually disappearing, however, and is not as important as it used to be. But some Japanese companies still retain the system and in this respect we can say that women are handicapped in promotion.

(3) Gaps in types of employment
Figure 2: Job composition for male and female workers

Next, we examine the differences between women and men by job type. In order to do this we surveyed the situations in various countries, but the pattern shown in Figure 2 is observable in all the countries surveyed. Male workers are generally classified into two groups, namely, high-level white collars engaged in specialist or management tasks and blue collar workers such as factory workers and those engaged in physical labor at construction sites. In contrast, Figure 2 suggests that most women hold a clerical or sales position, with very few engaged in a high-level white-collar job or physical work. This probably presents another point of contention as to whether or not such differences are attributable to gender peculiarities, or whether they reflect the different preferences of men and women. Given that the number of women pursuing a managerial or specialist position is gradually increasing in Japan, it is highly likely that the position gap between men and women will disappear in the future. However, we have yet to reach that point and I believe it is worthwhile to continue looking into the problem of female labor force participation from the standpoint of job type or job composition.

(4) Education gaps
Figure 3: Percentage of female college students by course of study (Comparison between 1980 and 2000)

As to the question of education, Figure 3 shows how male and female college students differ in their propensity to select various fields of study. From this figure, we can say all but a very few of those who choose to study engineering, shown on the left end of the graph, are men. Between 1980 and 2000 the share of women engineering majors has increased somewhat, but the absolute number remains very low, with women accounting for less than 10% of the total. The reverse can be seen at the right end of the graph, i.e. in domestic science, 80%-90% of the students are women. The norms that exist in the Japanese society today are a key determinant of the shape of this graph. Why do so many women major in domestic science? This can be seen as a reflection of ideas regarding gender roles in Japan. These ideas are so deeply rooted in Japanese society that for many women, domestic science is a "natural" choice and they are thus, in a sense, destined to become full-time housewives by this stage in their lives.

Beyond the "division of roles between men and women"

Earlier I referred to the issue of discrimination. Now let me highlight this issue from the perspective of female workers. In what sense do women feel discriminated against in pursuing their careers? Pay is the most frequently cited answer to this question. I mentioned that there is definitely a wage gap between men and women. From the point of view of women, these gaps are seen as discrimination. Also, many women feel they are not fairly evaluated for their capabilities and that they are discriminated against in terms of promotions and pay raises. They also complain that the tasks assigned to them are of a subordinate nature, which may be attributable to the aforementioned distinction between sogoshoku and ippanshoku positions. When we focus on female college graduates, the situation is even more conspicuous. While their male counterparts - those with an equivalent academic background - are assigned to positions that allow them to demonstrate their knowledge and ability, female college graduates hardly get such opportunities.

In this context, it is quite understandable why women see the current situation as discriminatory. On the other hand, however, there is a counterargument which says there is no discrimination from the standpoint of employers. Let me explain why: This is what we economists call "statistical discrimination." There is a phenomenon in which female employees - even if they are put on the career track and treated as a prospective candidate for a management post - quit in the middle of their careers. After working for several years, a substantial number of female employees choose to quit when they get married or when they have children. As long as this phenomenon, in which female employees leave after several years regardless of the training or good posts given to them, exists as a statistical fact it is quite possible that rational companies will decide not to appoint women to any important post. Such behavior on the part of companies is called statistical discrimination. Based on the viewpoint of statistical discrimination, companies may be tempted to abandon all attempts to promote or train female employees because, after all, they do not stay with the company.

Why do women accept this reality? The biggest reason is that they find child-rearing extremely demanding. Here, we face a major dilemma. It is a reality in Japan that women are forced to shoulder the majority of work at home, be it household chores or child-rearing. I call this "gender-based division of roles." If this division of roles is accepted by many Japanese people, at least as a norm we must accept the phenomenon of women quitting in the middle of their careers to stay home as a fact that cannot be totally ruled out.

Now, let's discuss how this norm or "gender-based division of roles" (i.e. men should work outside and women should stay home taking care of household chores and rearing children) has changed over years. Nationwide surveys were conducted in 1972, 1997 and 2002 asking people whether or not they approve of such gender-based division of roles. In the past, an overwhelming number of both men and women approved of the division of roles. More recently, however, there is a roughly even split between those who approve and those who disapprove of this norm. Thus, looking to the future, I would say that the need to support women who want to work outside the home will grow in the coming years, provided the trend toward disapproval of the division of roles continues.

Let me conclude by saying Japanese society is standing at a major threshold in many ways with respect to the gender issue. We will be soon entering an era of labor shortages as a result of falling birthrates, and that will be an era in which women will be needed in the workforce whether they like it or not. The question of whether and how Japanese society can support this change is the major challenge we face today.

>> Original text in Japanese

March 30, 2004