Womenomics: Japan’s Rocky Path to a “Society in Which Women Can Shine”

In fall 2018, top officials of Tokyo Medical University bowed their heads in front of the Japanese public to apologize for its long-held systematic exclusion of women from its institution. In doing so, they admitted to rigging entrance exam results for more than a decade since 2006 by boosting scores for male applicants while slashing them down for females “to restrict the number of female students and ensure more men became doctors,” and in reaction to the prospect of women cutting their careers short after having children. Studies have also revealed that the proportion of female doctors who passed the national medical exam has plateaued around 30% for the last 20 years, further suggesting that such systematic discrimination against women based on their sex is a widespread practice within the entire medical field in Japan, and not a phenomenon unique to Tokyo Medical University.

This scandal revealed the institutional sexism still deeply rooted within all corners of Japanese society, and served as a reality check for the progress of Prime Minister Shinzo Abe’s “Womenomics” policies that he has sought to champion ever since he took office in 2012. As it can be surmised from its name, Womenomics is a term coined to refer to a broad set of policies aimed at women’s economic advancement in Japan, as a subset of a group of economic policies called “Abenomics” aimed at the improvement of the overall Japanese economy – an ambitious goal of 15% GDP growth in Japan. In his address to the Sixty-Eighth Session of the UN General Assembly in 2013, Prime Minister Abe explained Womenomics as a policy aimed at promoting “the advance of women in society” for “higher economic growth in Japan.” Thus, although there is an overarching theme of improving women’s place in society, the utmost priority for the government in implementing Womenomics policies is to address the severe shrinkage of its labor market that has resulted from the country’s declining birthrates and rapidly aging population, rather than fostering greater gender equality.

So is Womenomics working? Somewhat – but it depends on how you define success. In terms of pure numbers, the rate of employment for females has risen to 49.8% by 2017, the highest it has ever been in the country’s history. In making this possible, the government implemented various policies to encourage women to enter the workforce. One principle policy was the vast expansion of public childcare centers aimed at easing women’s burden of caring for their children and working at the same time. The government has sought to incorporate men into such efforts as well, encouraging them to take advantage of the country’s paternity leave policy that had been severely underutilized since its establishment in 1991– an average of 30.4 fully paid weeks of leave allotted for those earning an average wage, which is the highest out of any other country in the world. Among various other policies, it had also set an ambitious goal of reaching a 30% threshold for women in leadership and management positions by 2020 to achieve proper representation of women in the workplace.

However, upon a closer look, Womenomics falls far short of addressing the gender inequality entrenched deep within the society, thereby continuing to discourage women who desire to enter the workforce. Even after various reforms, Japan was ranked 110 out of 149 countries surveyed in the World Economic Forum’s Global Gender Gap Report in 2018, placing last out of all G7 countries. One cause of such low ranking is the fact that, despite the increased proportion of working females, more than half of them are part-time, contract-based workers who receive low pay, little substantial responsibilities, and consequently a lack of opportunities to advance themselves further in their careers. Japan also still remains the country with the third-highest gender wage gap out of all OECD countries at 24.5%, well above the OECD average of 13.8% – a blatant indication that women still receive significantly less pay than men for similar work.

Further causes of this gap stem from the limited effects of the aforementioned reforms attempted by the government to encourage increased female participation in the workforce. For one, despite the increased number of public childcare centers, accessibility remains difficult, with tens of thousands of children still on waitlists that grow exponentially every year, hindering many mothers from returning to work. In terms of paternity leave, the percentage of eligible men taking paternity leave has stagnated at a mere 2-3%, falling far short of the government’s initial goal of reaching 13% by 2020. Furthermore, as there are no penalties or substantive incentives attached to the Japanese government’s mere encouragement of increased inclusion of females into leadership positions, the current figures lag far behind the government’s initial goal at 12.4% overall, and an even lower rate of 3.7% in the private sector specifically, according to WEF’s report in 2018. As a glaring example, there is only 1 female in Prime Minister Abe’s newest 19-member cabinet– a somber, yet realistic reflection of the continued lack of female representation in leadership positions, which has led the government to cut down its target to 7% women in senior government positions and 15% for private executive roles, compared to their initial goal of reaching 30%.

Image: Reuters

Despite these drawbacks, it should be acknowledged that Womenomics policies have seen some success in boosting the economy – the government’s main objective – as the country has indeed seen a steady rise in GDP since the beginning of Prime Minister Abe’s term in 2012. Looking to the future, an increase in not only quantity, but also quality, of women’s participation in the workforce will be the central key to even greater economic growth in Japan. Jesper Koll, head of WisdomTree Japan and a prominent economic expert, specifically stresses the importance of the inclusion of women into the workforce in the country’s economic growth so far, citing that Japan’s current growth rate of 1.5 to 2 percent would have been cut down to around 1 to 1.5 percent if it weren’t for improved women’s participation in the workforce. Kathy Matsui, Vice Chair of Goldman Sachs Japan who first coined the term Womenomics in 1999, furthers Koll’s point through her 2014 report pushing for even greater reforms aimed at closing the gender employment gap, which she has projected would boost Japan’s GDP by nearly 13%. Other economists rally behind a similar rationale by arguing that closing the gender employment gap would especially boost corporate performance, as Japanese corporations with a greater proportion of females in senior management have consistently shown higher performance rates.

Therefore, if the Japanese government wants to ensure even further economic growth, it should invest more efforts on addressing the underlying gender inequality prevalent within the Japanese society, thus ensuring that more women feel sufficiently supported to participate in the workforce. Not only would increased structural support help boost the economy, but there is a high chance that such improvements would also address the fundamental problem that Womenomics was first implemented to solve–severe labor shortage– as more women themselves enter the workforce and the increased overall family income and improved childcare services lead to increased birth rates, remediating the country’s rapid population decline. 

Implementation of further policies to achieve greater gender employment equality becomes even more appealing once we take a look at the case of Nordic countries– which stand on the other end of the gender equality spectrum– and the effect greater gender employment equality has had in their economic growth. According to an OECD report by the Nordic Council of Ministers, Nordic countries such as Sweden, Denmark, Iceland, and Norway have achieved a remarkable increase in their working-age (15-64) female employment rate since the mid-1960s, as high as Sweden’s jump of almost 30 percentage points in the last 50 years. This increase in female employment has made a substantial contribution to the economic growth of Nordic countries in the last 50 years, with increases in women’s employment accounting for around 0.25-0.40 percentage points, or roughly 10-20%, of the annual GDP per capita growth rate. The report attributes the cause behind such success as the so-called “Nordic approach” that focuses on work friendliness and promotion of a “dual earner-dual career” family model, which “encourages continuous full-time employment for all men and women (emphasis added)” with “the state expected to provide them with the services and supports necessary to do so.”

Thus, further improvements in gender employment equality in Japan could come in the form of expanding policies that have already been enacted to ensure greater work friendliness, such as further expansion of childcare facilities that can accommodate the rapidly growing demand from mothers returning to work, as well as more stringent policies that mandate both the public and private sectors to reach a certain percentage of female representation in leadership positions. It would also be important to pass legislation aimed at closing the gender gap prevalent in areas such as wages and social benefits to ensure that all workers are treated fairly regardless of gender. For instance, the current Japanese spousal tax deduction law, created in 1961 to encourage single-income households composed of a primary earner and a stay-at-home caregiver, gives tax breaks to primary earners if their spouse’s yearly income is significantly low – another factor that contributes to the systematic exclusion of women from the workforce. The government did consider eliminating this spousal deduction entirely as a part of their fiscal tax reform in 2017; however, out of concern that it would upset many of those in favor of the widespread family system comprised of an income-earner and a homemaker, it merely ended up increasing the income cap of secondary earners from the original 1.03 million yen to 1.5 million yen as the requirement to qualify for tax deductions. Such reform only benefits households comprised of one full-time and one part-time employee at most, resulting in only limited effects in promoting full-time employment, or any employment for that matter, of women.

A more far-reaching reform following the Nordic countries’ “dual earner-dual career” family model, such as a uniform tax law for married couples regardless of income to encourage full-time female employment, would be incredibly helpful in promoting greater gender employment equality and subsequent economic growth. However, as it can be seen from the tax reform and Tokyo Medical University examples illustrated above, the foremost challenge in Japan today is the deeply rooted gender inequality prevalent in all areas of society that continues to prevent women from entering the workforce. It is therefore most important for the government to lead the way in transforming the underlying social beliefs about the role of women in society for its structural reforms to take hold efficiently. 

This means challenging the widely-held belief that women should stay at home by leading the push for greater education and training for women through expansive institutional reform, so that they can be adequately prepared to reach their full potential of participating in the workforce. It means cracking down on unfair employment practices against women for their sex that bar them from participating in the economy as they would like, as was in the case of the Tokyo Medical University’s manipulation of entrance exam scores to favor male applicants over their female counterparts. It also means transforming the society’s negative perception of men who take paternity leave, so that more men are encouraged to help with child rearing and thus allow women to feel more comfortable with being a mother and a participant of the workforce at the same time. It means implementing strict policies to ensure that female workers do not suffer from hostile treatment currently prevalent in the workplace, most commonly in the form of matahara (“maternity harassment”)– workplace harassment targeted against pregnant and post-pregnant women who remain in the workforce. And it means continuing to expand reforms aimed at increasing workplace accessibility for women, such as increased child care facilities, adequate representation of women in senior management positions, and improved tax reforms.

In his aforementioned address to the UN General Assembly, Prime Minister Abe stressed his goal of creating a “society in which women can shine.” The inclusion of women into the greater economic agenda is no doubt a big step forward– and it has shown promising results, albeit certainly not fast or efficient enough for both gender equality and economic growth. In order to achieve even further positive outcomes, the Japanese government should invest in much more extensive efforts to remediate the inherent gender inequality rooted deep within the Japanese society and ensure that women feel welcomed into the workforce, in pursuit of a world in which women can truly shine to their full potential, both for themselves as well as for the overall Japanese economy.