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More Japanese women are working—but for the economy to thrive they need to be running things

Japanese job-hunting students dressed in suits attend a business manners seminar at a placement centre in Tokyo May 28, 2012. With just over nine jobs awaiting every 10 of the 381,000 students graduating and looking for work this year, and the most coveted with the likes of Toyota or Nomura even more scarce, job-hunting has become fiercely competitive. The current heads of Japan's companies are often criticised for failing to keep pace with fleet-footed foreign rivals, but most are a product of that system and there is nothing to suggest it will change any time soon.Picture taken May 28, 2012. To match Insight JAPAN-ECONOMY/JOBS REUTERS/Toru Hanai
Reuters/Toru Hanai
Did someone finally give her a job?
By Gwynn Guilford
JapanPublished Last updated This article is more than 2 years old.

Japan sure has it tough: Even if the world’s third-biggest economy triumphs against deflation, a rapidly aging population will make it increasingly hard to achieve economic growth. You know what would be amazing? If it had a secret weapon that could somehow bring in new talented workers and supercharge its economy.

Oh, wait. It does have that. Adding 8.2 million women to Japan’s workforce—which is what would happen if women joined the workforce at the same rate as men—would add a whopping 15% to its GDP, according to Goldman Sachs economist Kathy Matsui. Others argue the impact would be around 9% (pdf, p.19), which is still a lot.

Fortunately, this is starting to happen (h/t @JacobWolinksy). In Nov. 2013, female labor participation among women 15 to 64 hit a record-high of 66%, a big jump from the 63.9% a year earlier (data available here):

Based on annual data except for 2013, which reflects labor force participation as of November.​

Now, that doesn’t necessarily mean that Shinzo Abe’s policies to encourage women to work—expanding free child care services, asking corporations to allow a kind-of-insane three-year maternity leave, and directing government ministries to hire more women—necessarily deserve the credit.

For one, these jobs could be temporary; the Japanese government data don’t specify whether these new working women are housewives who have taken on part-time work. Female labor participation often jumps when real wages fall (pdf, p.3), says Credit Suisse. That could mean households are simply reacting to inflation. If the jump in employment is in mostly unskilled sectors, where workers are fungible, it wouldn’t signal a societal shift.

"The Political Economy of Gender in Japan in Comparative Perspective," Frances Rosenbluth
As you can see, sectors that employ lots of women tend to be unskilled jobs.

It’s in those skilled jobs that women face a tremendous amount of hiring discrimination and are frequently passed over for promotions, particularly at large companies. At present, only 1.6% of executives (paywall) at publicly traded Japanese companies are women. Japan could use the boost to productivity that would come as men in top jobs faced fiercer competition from the country’s most educated women. And when it comes to those, Japan’s got a pretty deep bench:

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