Japanese companies need to get women on board
1 September 2016
Author: Masayuki Morikawa, RIETI
The current potential growth rate of the Japanese economy is estimated to be less than 0.5 per cent. Given Japan’s rapidly declining working-age population, it will be critical to increase the labour participation rate of women and elderly people in order to promote economic growth. The ‘new three arrows’ of Abenomics stress the need for Japan to ensure the ‘dynamic engagement of all citizens’ in the economy.
Japan’s labour force is predicted to decrease by 0.8 per cent per annum until 2030, which would reduce the annual real GDP growth rate by 0.5 per cent. To mitigate this trend, the Japan Revitalization Strategy set a labour participation rate target of 73 per cent for women aged between 25 and 44 years by 2020. This entails an increase of 5 per cent from 2012 levels.
Japan is known for its low level of female participation in senior positions. To address this problem, the Japan Revitalization Strategy encourages firms to employ more women as directors and managers. For example, the strategy states that listed firms should each have at least one female director on their board.
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