Empowering Women Could Boost Fertility, Economic Growth in Japan and Korea

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Empowering Women Could Boost Fertility, Economic Growth in Japan and Korea







May 21, 2024







Creating a supportive environment for women through family-friendly policies, flexible labor markets, and progressive social norms will yield economic gains


Women in Japan and Korea face especially tough challenges juggling career
and family. Many young women witness their peers encountering promotion
delays after marriage and childbirth, dealing with problems splitting
housework responsibilities, and having difficulty finding adequate
childcare. The financial burden associated with raising children, including
the costs of larger living spaces and ensuring a competitive education for
their offspring, is an additional factor affecting couples’ decisions on
whether to expand their families.

Consequently, later marriages and childbirth have become increasingly more
common, contributing significantly to declining fertility in these two
countries. At 0.72 and 1.26, respectively, the latest fertility rates in
Korea and Japan are among the lowest in the world. Meanwhile, large gaps
between men and women still exist in employment and wages, particularly for
leadership positions. Representation of women in senior management roles is
less than 15 percent in both Japan and Korea, among the lowest in G20
countries. What are some of the conditions in and outside the workplace
that contribute to low fertility and large gender gaps for both countries?

Social norms in these two countries place a heavy burden on women. Women in
Japan and Korea perform approximately five times more unpaid housework and
caregiving than men, more than double the OECD average for gaps between men
and women in unpaid work. Fathers in these two economies take less
paternity leave compared with those in peer economies, despite more
generous benefits.

Furthermore, something known among economists as “labor market duality”
disproportionately affects women. In both countries, this means that a
large share of women workers hold temporary, part-time, or other types of
“non-regular” positions with low wages and limited opportunities for skill
development and career advancement. In particular, some women who left the
labor force (departing jobs with regular hours and benefits) during the
early years of their kids’ childhood could only return to “non-regular”
positions. Seniority-based promotion systems further penalize mothers who
return to work.

Finally, working arrangements in these countries are often not
family-friendly. Long working hours, inflexible schedules, and limited use
of telework in Japan and Korea make balancing career and childcare
responsibilities extremely challenging for women.

The governments of Japan and Korea have acted to support women, including
through enhanced childcare and maternity leave policies, but more efforts
are needed from these governments, business communities, and society at
large:

First, reducing “non-regular” employment conditions, encouraging
merit-based promotions, and facilitating more job mobility can help support
more employment and career growth opportunities for women. A recent IMF

analysis on Korea estimates that reducing severance payments for regular workers (which eases
dismissals and facilitates labor reallocation for both men and women) by 30
percent alone can significantly increase labor force participation among
women and productivity growth (by 0.9 and up to 0.5 percentage point,
respectively).

Work discouraged

The productivity gains could be further increased if complemented with
measures to support career development and facilitate job mobility for
women. The net impact on male workers is also positive due to a more
effective allocation of labor. Recent IMF

research on Japan suggests that various distortions in Japan’s tax and social security system
discourage second-income earners—a large portion of employed women in the
country—from working more.

Second, further expanding childcare facilities and facilitating fathers’
contributions to home and childcare, including establishing stronger
incentive mechanisms for paternity leave use, are crucial. Japan’s
fertility rate mostly stabilized after the country expanded childcare
facilities over a decade ago, and recent IMF studies on Japan confirm that
increasing such facilities further would have a positive impact both on
fertility and women’s career advancement.

Third, facilitating a cultural shift in the workplace by expanding the use
of telework and flexible working-time arrangements could support increased
women labor participation, while also allowing men to share more
responsibilities at home.

Rising female labor force participation has already contributed to the
post-pandemic growth recovery in Japan and Korea, while significant gains
would result from further closing the gender gap. IMF analysis suggests
that policies that reduce
Korea’s gap between men and women in hours worked in to the OECD average by
2035 can boost the country’s per capita GDP by 18 percent compared with no
change.

Another IMF study shows that bridging Japan’s large gap in science, technology, engineering,
and math (STEM) fields can boost the country’s total factor productivity
growth by 20 percent and social welfare by 4 percent.

In Japan and Korea, policies aimed at closing gender gaps and progressively
shifting cultural norms will help increase the growth potential, despite
demographic headwinds. They also can help gradually reverse declining trends
in fertility, allowing women in Japan and Korea to manage having a family
while pursuing fulfilling careers, and, in turn, to contribute
significantly to their economies and societies.

****

 — Kohei Asao, TengTeng Xu and Xin Cindy Xu are
economists in the IMF’s Asia-Pacific Department. For more information,
see recent see recent
Korea
Country Report Annex XII, “Addressing Gender Gaps in the Labor Market”,
prepared by Jorge Mondragon and Eonyoung Park, selected issues papers on

Structural Barriers to Wage Income Growth in JapanWomen
in STEM Fields in Japan
Japan’s Fertility: More Children Please, and

Why So Few Women in Leadership Positions in Japan?

 

 



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