Global Economics Monthly: Making Womenomics Work
September 22, 2014
The Japanese economy has been under-performing since the 1990s, and—with a shrinking population and the highest debt-to-GDP ratio in the world—it is at risk of doing even more poorly over the next couple of decades. The only way Japan is going to be able to improve its long-term growth trajectory is by getting more people into the workforce and increasing worker productivity. Prime Minister Shinzo Abe’s “womenomics” agenda holds the promise of addressing both elements of this formula by better utilizing the half of Japan’s population that at present is not meaningfully employed. But Tokyo has tried to address this challenge before—in 1986 with the equal employment law and in multiple iterations since—and has yet to make a significant impact on women’s economic opportunities. The missing ingredient has been a capacity for hard-nosed enforcement, without which companies have had no real incentive to change. The test of Abe’s reforms will be whether they lead to real changes in Japanese corporate behavior.