Japan could boost its GDP by 12.5 per cent if it closes the gender gap and gets more women into the workforce, a new report says.
The finding, by Goldman Sachs, echoes calls by economists and Japan’s prime minister for more opportunities for women, in a bid to lessen the impact of a shrinking and greying population.
“If Japan’s female employment rate as of 2013 (62.5 per cent) rose to that of males (80.6 per cent), this would add 7.1 million employees to the workforce,” Goldman Sachs Group said.
“We estimate the absolute level of Japan’s GDP could be lifted by as much as 12.5 per cent,” the financial giant’s Japanese arm said in its latest ”Womenomics” report.
The potential increase is among the highest in the world, but lags Greece, at 18 per cent, and Italy at 16 per cent.
Prime Minister Shinzo Abe has said he is determined to make better use of Japan’s potential female workers as part of his strategy to revitalise the country’s underperforming economy.
“Japan must become a place where women shine,” has been a mantra in a number of speeches in which he has said he wants women to account for 30 per cent of leading positions by 2020, the year Tokyo hosts the Summer Olympics.
Most commentators believe the target is highly ambitious -- the rate is currently around 11 per cent in the private sector, and lower than that in the public sector.
Economists agree that Japan’s well-educated women are a huge source of untapped potential, with many dropping out of the workforce when they have children and few returning to their careers.
Japan’s birthrate is one of the world’s lowest at around 1.4 per cent. The nation’s population is expected to shrink by nearly 40 per cent by 2060 in the worst-case scenario.
“Since the three key determinants for economic growth are labour, capital and productivity, Japan’s severe demographic headwinds mean that unless radical steps are taken quickly, the nation faces the risk not only of longer-term economic stagnation, but of economic contraction and lower standards of living as well,” the report said.
The report, an update of one issued in 2010, which put the potential boon at 15 per cent, called for a number of reforms. Among suggestions were the deregulation of the daycare/nursing care sectors, amendments to tax and social security codes, and mandated gender-related corporate disclosures.
“Perhaps one of the greatest barriers to higher Japanese female employment is Japanese society itself,” the report said.
In a 2012 Cabinet Office survey, 52 per cent of the Japanese respondents stated that women should stay at home and men should work, up 10 percentage points from the previous survey in 2009.
“In order to help change the mindset, much work needs to be done to dispel myths and encourage greater gender equality at home,” the report said.