Can Women Save Japan? Brookings Event: From The views expressed - - PowerPoint PPT Presentation

Can Women Save Japan?

Brooking’s Event: From Abenomics to Womenomics

Chad Steinberg, IMF Washington, D.C. – September 25, 2013 The views expressed herein are those of the author and should not be attributed to the IMF, its Executive Board,

• r its management.

MOTIVATION

Japan’s demographic change is unprecedented

• 2.5
• 0.5

1.5 10 20 30 40 50 60 70 80 90 100 1980 2040

Source: MIC and IPSS

Demographic Change (1980-2040)

(Million people)

Age

50 100 150 200 250 50 100 150 200 250 1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050

Forecast DEU FRA JPN GBR

Source: UN

Working-age Population (1950- 2050) (Index, 1950=100) Can Women Save Japan?

Can Women Save Japan? MOTIVATION

…but Japan has a highly-educated secret weapon: an army of housewives

MOTIVATION

Raising female labor participation (FLP) could increase GDP by as much as 8 percent

420 460 500 540 580 620 660 420 460 500 540 580 620 660 1990 1995 2000 2005 2010 2015 2020 2025 2030

Forecast Baseline With G7 FLP ratio With Northern Europe FLP ratio

Source: WEO and IMF staff estimates.

Real GDP: Policy Scenario with Higher FLP (In trillion yen) 28.5 25.0 14.1 13.1 12.2 5.7 5 10 15 20 25 30 35 5 10 15 20 25 30 35

Source: OECD, and IMF staff estimates

Difference by Gender in Prime-age Labor Participation (In % pts., 2009) Can Women Save Japan?

CROSS-COUNTRY EVIDENCE

Increases in FLP are associated with a large demographic shift

Can Women Save Japan? 1 2 3 4 5 6 20 40 60 80 100

Number of Countries FLP

1985 2005 FLP Distribution Across 22 Countries

Source: OECD

Japan 1985 Japan 2005

40 50 60 70 80 90 100 110 120 80 90 100 110 120 130 140 150 160

1970 1975 1980 1985 1990 1995 2000 2005

FLP Education Marriage rate (RHS) Number of children per woman (RHS)

Source: OECD, UN, and IMF staff estimates

Demographic Variables and FLP Changes (1970-2007) (Index, 1970=100)

CROSS-COUNTRY EVIDENCE

...with policies becoming more important as demographics converge

AUS CAN DEU ESP FIN FRA ITA JPN NLD NOR PRT SWE USA

30 40 50 60 70 80 90 0.5 0.6 0.7 0.8 0.9 1

FLP Children per Woman

FLP vs. Children per Woman (1980)

AUS AUT CAN CHE DNK ESP FIN FRA GBR GRC IRL ITA JPN LUX NLD NOR NZL PRT SWE USA DEU

65 70 75 80 85 90 0.4 0.45 0.5 0.55 0.6 0.65

FLP Children per Woman

FLP vs. Children per Woman (2008) Can Women Save Japan?

Source: OECD Source: OECD

Can Women Save Japan? CROSS-COUNTRY EVIDENCE

…but there are no policy silver bullets

Wage gap

• 0.27

Log (Family allowance) 0.14 Log (Leave) 0.36 Log (Child benefits)

• 0.13

Part-time incidence

• 0.19

Log (Childcare per child)

• 0.03

Log (Tax wedge)

• 0.73

Source: Fund staff calculations Impact of 1 S.D.

Effects are relatively small Tax incentive and cash payments work best at lower incomes Leave policies must be generous to be effective Women have a strong preference for part-time work Wage gaps and childcare are good predictors of cross-country differences

JAPAN-SPECIFIC HURDLES

Hurdle 1: Employment and Promotion Policies

20 40 60 20 40 60

Share of Total Sogoshoku Share of Newly Hired Sogoshoku Share of Companies with Equal Promotion

2000 2010 Female Sogoshoku Workers in 2000 and 2010 (In percent) 10 20 30 40 50 USA FRA DEU GBR DNK JPN KOR Female Managers (2009)

(As percent of total)

Can Women Save Japan?

Source: MHLW and IMF staff estimates Source: UNDP

JAPAN-SPECIFIC HURDLES

Hurdle 2: Balancing Family Responsibilities with Work

20 40 60 80 100 20 40 60 80 100

15-19 20-24 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-64 65-69

DEU JPN DNK USA

Female Labor Participation Rate by Age Group (2009) (In percent) Can Women Save Japan?

Source: OECD 0.6 0.4 0.1 0.1 0.2 0.1 0.4 0.2 0.3 0.3 0.1 0.1

0.0 0.2 0.4 0.6 0.8 1.0 1.2 0.0 0.2 0.4 0.6 0.8 1.0 1.2 SWE GBR DEU USA JPN KOR

Childcare spending as a % of GDP Pre-primary spending as a % of GDP Source: OECD

Public Expenditure on Child Support (2005) (In percent of GDP)

Can Women Save Japan?

Further reading

“Can Women Save Japan?” IMF Working Paper No. 12/248 “Women, Work, and the Economy: Macroeconomic Gains from Gender Equity,” IMF Staff Discussion Note No. 13/10