Has Abe's Womanomics Worked?

• Date: 01 January 2018
• Published date: 01 January 2018
• DOI: http://doi.org/10.1111/aepr.12202
• Author: Nobuko Nagase

Has Abe’s Womanomics Worked?

Nobuko NAGASE†

Ochanomizu University

The present paper estimates the effect of the Abe Cabinet’s Womanomics policies that aimed to

increase female labor supply and keep women on a career path. The policies are surveyed, and

the effects are estimated using microdata from the Labor Force Survey combined with data at the

prefectural level on day care provision. A difference-in-difference (DD) method is applied to

uncover the impacts of the Abe Cabinet’s policies. The rapid increase in the provision of infant

care, especially in the urban area, has contributed to a strong increase in the labor participation

of mothers with young children. In addition, DD method estimates show a strong increase in

mothers with infants staying in permanent-contract regular employment. A significant shortening

of work hours of workers, especially of parents with infants, is observed, which enabled working

mothers to maintain their employment status. A change in the gender wage gap in the Japanese

labor market is observed, but much progress is still required to close the large wage gap.

Key words: day care, female labor supply, gender wage gap, nonstandard work arrangement,

parental leave

JEL codes: J13, J21, J31

Accepted: 7 September 2017

1. Introduction

Japan’s working population is shrinking rapidly. Improvement of the birth rate and

simultaneous increase of the female labor supply are essential for the Japanese econ-

omy to increase labor force. Successive Japanese governments rolled out policies to

encourage both child bearing and increased labor supply by mothers from the 1990s

with surprisingly little success. From around 2010, we have seen some changes in the

scenery.

The Abe Cabinet was formed in late 2012 and announced that “Womanomics”was

a key policy for economic growth. The core of the third arrow of Abenomics’“Japan

The author thanks Ayako Kondo, Masako Kurosawa, and other participants of the Asian Eco-

nomic Policy Conference and the editors of the journal, especially Takatoshi Ito and Colin

McKenzie, for their insightful and helpful comments. The author also thanks Japan’s Statistics

Office for providing the microdata for the Labor Force Survey. The data were applied for and

used, based on funding provided by an Abe Fellowship and by the Japan Society for the Promo-

tion of Science (JSPS) Grant in Aid for Scientific Research (C) No. 15K03503, for the project

“East Asia’s Declining Birthrates, Institutions to Match Spouses, and Labor Markets”(Project

Leader: Nobuko Nagase).

†Correspondence:Nobuke Nagase, Department of Social Sciences and Family Studies, Ochanomizu

University, 2-1-1 Otsuka, Bunkyo-ku, Tokyo 112-8610,Japan. Email: nagase.nobuko@ocha.ac.jp

68 © 2018 The Authors. Asian Economic Policy Review published by John Wiley & Sons Australia, Ltd on behalf of

Japan Center for Economic Research

This is an open access article under the terms of the Creative Commons Attribution-NonCommercial-NoDerivs

License, which permits use and distribution in any medium, provided the original work is properly cited, the use

is non-commercial and no modifications or adaptations are made.

doi: 10.1111/aepr.12202 Asian Economic Policy Review (2018) 13, 68–101

Revitalization Strategy”is promoting women’s active participation in Japanese society.

The present paper examines how well this policy has worked.

The main aims of Womanomics are: (i) to increase women in leadership positions,

(ii) to eliminate childcare waiting lists by increasing the supply to childcare places,

(iii) to encourage men to take more active roles in parenting, and (iv) to achieve better

work and life balances and reduce the infamous long working hours of Japanese com-

panies (Muraki, 2013). As we will see later, many of these policies had already been

started before the Abe Cabinet took office. Was Abe more successful in the implemen-

tation of these policies than earlier administrations? On the whole, nonstandard

employment has been on the increase throughout the 2000s in Japan, while the wage

gap between permanent-contract regular employees

1

and nonstandard employees has

been huge compared with other countries, even after controlling for such factors as

educational attainment, tenure, and occupation (Nagase, 1997a, 2003a; Osawa et al.,

2012). Therefore, an increase of women in permanent-contract regular employment is

an important indicator of women’s career prospects that the present paper will focus

on. The nonstandard employees (hiseishain) are hourly workers called “part-time,”

“arbeit (temporary),”“temporary dispatched,”“fixed-term contract,”and other

workers. The largest share of nonstandard employees is made up of “part-time”and

“arbeit,”and this group will be called “hourly part-time.”

The present paper finds that during the period 2013–2015, there was a substantial

increase in the proportion of new mothers continuing to work as permanent-contract

regular employees. The labor supply of mothers with infants has significantly increased

since 2013 under the Abe administration for both permanent-contract regular

employees and nonstandard employees. Apart from the impact of the changes in labor

supply brought about by the favorable changes such as increase in child care leave

allowance and reduction of living work hours introduced during the Abe administra-

tion, the strong growth in the provision of accredited infant care has had a significant

effect on increasing the supply of maternal labor. The hours worked by mothers with

infants, especially those in permanent-contract regular employment, have decreased

substantially,and the hours worked by fathers and single males and females have

decreased by smaller but significant amounts as well. These changes can be viewed as

significant positive impacts of Abenomics. The number of women in leadership posi-

tions, however, is still very low as of 2015, although a major law was enacted in 2016,

and we need to wait to see the effect of this new law. The structural factors retaining a

gender income gap still remain a future challenge.

The structure of the present paper is organized as follows. The present paper will

first give a short background introduction of the past measures taken by the Japanese

government to increase female labor supply and to allow childbearing along with work.

It will then provide detailed policies aimed at increasing work and life balance and

increasing women on the career ladder in order to show descriptive analysis of outcome

variables. Section 4 discusses the estimation strategy that is used to discover the impact

of policy measures on labor supply, which will be explained on labor market outcomes,

while Section 5 discusses the results. Section 6 provides some concluding remarks.

Nobuko Nagase Has Abe’s Womanomics Worked?

© 2018 The Authors. Asian Economic Policy Review published by John Wiley & Sons Australia, Ltd on behalf of

Japan Center for Economic Research

69

2. General background: low maternal labor supply until early 2000s and

subsequent change

After the total fertility rate fell to 1.57 in 1989, the Japanese government sought to

increase the birth rate by reducing the opportunity cost of children for working

women. The main measures implemented in the 1990s and early 2000s were the intro-

duction of a childcare leave program, its later enhancement, and an increase in the

number of accredited childcare places.

Notwithstanding these policies, changes in maternal labor supply were small until

around 2005. According to the results of National Fertility Surveys, although the child-

care leave program enacted in 1992 allowed those parents with leave entitlements to

take 1 year’s leave without losing their jobs, around 40% of new mothers continued to

quit their jobs until the early 2000s due to marriage and then childbirth, just as they

did in the 1980s and 1990s (Nagase, 1999; Nagase & Moriizumi, 2013). Asai (2015)

estimates the effect of the increase in the childcare leave allowance implemented in

2001 among those with leave entitlements but finds no impact on maternal labor sup-

ply or work continuation. Abe (2010, 2011) shows that despite the implementation of

the Equal Employment Law in 1986 and its enhancement in 1997, and further amend-

ments in 2007 and 2017, the ratio of women in permanent-contract regular employee

positions, where income often increases with tenure, never increased among women in

their mid-30s–40s. Teramura (2014) analyzes corporate culture pushing women

workers to quit upon marriage and childbirth. Eunmi and Brinton (2015) also point to

the importance of workplace culture for women to take childcare leave. Evidence from

the Ministry of Health, Labor and Welfare’s (MHLW) 2004 Longitudinal Survey of

Adults of 21st Century indicates that only 27% of permanent-contract regular employees

and less than 20% of all workers replied that they felt the childcare leave program was

accessible and easy to use (Nagase, 2014). Marriage and childbirth continued to be

delayed and deferred while more women stayed single and worked (Iwasawa, 2004).

Many studies such as Unayama (2011) find strong positive effects of day care pro-

vision on female employment at marriage and at childbirth. Nagase (2007), however,

points out that the actual increase in infant care was quite limited in urban centers

where demand was mounting. Asai et al. (2015) find that childcare provision increased

maternal employment in nuclear families but not in extended families, where day care

seems to have substituted informal childcare provided by grandparents.

The government acknowledged the importance of changing work culture for both

males and females in the early 2000s, and the Basic Act for Measures to Cope with

Society’s Declining Birth Rate of 2003 mandated municipalities as well as firms with

more than 300 employees to produce action plans to help employees who were raising

children. The Cabinet Office introduced an award system for firms with high work–life

balance awareness that allowed these firms to display a government certification

(“Kurumin”mark) on their products, even though the criteria for the award itself

involved implicit gender division at Japanese companies, such as a female use of child-

care leave exceeding 70% and “at least one male child care leave user.”In late 2007,

Has Abe’s Womanomics Worked? Nobuko Nagase

70 © 2018 The Authors. Asian Economic Policy Review published by John Wiley & Sons Australia, Ltd on behalf of

Japan Center for Economic Research