Childcare not the only cost for working women in Japan

Author: Mark Fabian, ANU

Japan has recently moved to increase its female labour force participation rate, with the government allocating significant resources to tackling Japan’s longstanding shortage of child care places. Alongside this expansion in child care services, immigration laws are to be relaxed to allow for the recruitment of more foreign nannies. While these reforms are critical and long overdue, more must be done to increase female agency if Japan is to optimally utilise its female population.

A mother and child cycle past an electronic stock board of a securities firm in Tokyo, 21 January 2013. With the aim of increasing the female labour force participation rate, the Japanese government has begun to allocate significant resources to tackling longstanding childcare shortages. (Photo: AAP)

In 2013, Japan’s female labour force participation rate for 15–64 year olds was 64 per cent; low by OECD standards. Greater availability of affordable child care should improve this figure, as there is a clear correlation between expanding child care services and women taking up paid work in Japan. Given that the shortage of places has been documented since at least the Koizumi administration, an easing of constraints here should see quick results.

But it is not that easy.

For starters, the government is coming up against barriers to expansion, notably the lack of qualified staff and the relatively high cost of low-skilled labour in Japan, which makes child care expensive by OECD standards. Looser immigration laws might help but are a politically difficult reform. Another option is to utilise Japan’s large population of retirees. Those interested in child care work with experience raising their own children could be offered fast-tracked qualifications.

If successful, a policy to this effect would solve multiple problems. It would ease the labour shortage and expand child care provision. It would allow older workers to be retained by the workforce. And it would provide Japan’s elderly, who are often lonely, more opportunities to socialise.

Another issue is that childcare only frees up parents for around six hours a day, which is not enough to engage in regular full time employment under current conventions in Japan. Work hours in Japan are notoriously long, and flexible work arrangements are rare and viewed disparagingly by management.

This means that childcare will largely allow women only to enter irregular work. But part time wages in Japan are low compared to wages for regular workers, so women employed in such positions will not be paid appropriately for their level of education. This is a waste of human capital. Moreover, the large degree of duality in the Japanese labour market between regular and irregular workers is already a drag on productivity, and thus increasing this divide would be undesirable.

For women to be mothers and participate in work at a level commensurate with their skills, cultural change is required at the organisational level. Some obvious changes include greater provision of flexible work times, efforts to schedule meetings at times that suit working parents, the phasing out of the seniority-based wage system (nenko jyoretsu) and other practices that reward time in the office rather than output, and an acknowledgment that women are just as capable as men of performing in managerial roles.

Yet Japanese firms are notoriously reluctant to change their attitudes and practices. A glaring example is the negligible impact of Japan’s equal opportunity legislation. Abe’s push for a 30 per cent female management quota should help. It will discourage firms from placing women on the irregular/clerical track by default, and encourage them to retain and invest further in female workers who marry — rather than pressuring those who are unwilling to commit to long hours at the office to leave. Women could then engage fully in the workforce, confident they can continue their careers after marriage and children.

A change in organisational culture to accommodate parenting would also allow men to spend more time in the home, an important condition for high quality labour force participation by mothers. Women cannot be expected to take care of the home and work a full-time work week. But here policy comes up against the intractability of culture at the societal level. Japan has had big economic incentives for reform for some time but failed to capitalise, in large part because of cultural inertia.

One pertinent example is Japan’s parental leave system, which rivals Scandinavian systems in its incetivisation of getting men involved in parenting, yet is utilised by few men — just 1.9 per cent in 2012. Much of this relates to the disapproval of workplaces, but more diffuse societal factors play a part. While traditional gender roles are slowly losing popularity, they remain entrenched. In 1979, more than 70 per cent of respondents to a survey by the Gender Equality Bureau of Japan agreed that men are expected to work while women are expected to keep the home. The percentage fell by 2009, but was still high at 45.8. The continuity of these gender norms is implicated in the difficulties associated with career advancement for Japanese women and their atypical rates of graduation from university — Japan is one of the only countries in the OECD where fewer women graduate from university than men.

Essentially, the opportunity cost of getting educated and working hard is relatively high for Japanese women.

As women are offered more respect from employers, their parenting desires are better accommodated by spouses and firms, and their potential contribution to the economy more widely acknowledged, this opportunity cost should fall and more women will engage more actively in the workforce. Unfortunately, this will require cultural change, which is difficult to accelerate with policy.

Mark Fabian is a postgraduate student in economics at the Australian National University.