4. Human Capital and Capabilities:

Let’s delve a bit deeper into the development economics theories and how they frame Japan’s gender wage gap:

  • Human Capital Theory (HCT): HCT, in the development context, underscores the importance of investing in people (through education, training, health) to improve their productivity and earnings. In principle, if Japan’s labor market were purely meritocratic, wages would mirror productivity, and any gender gap would reflect differences in human capital. Historically, Japanese women did have lower workforce experience on average (due to early exits for family reasons), which partly explains lower earnings. For example, a woman who leaves work for several years to raise children will have less seniority and may miss promotions, causing a wage penalty when she returns – this is sometimes termed the “motherhood penalty”. However, HCT alone cannot justify the 22% gap we see today, because Japanese women have high education levels and increasingly similar work experience lengths as men (especially as more women remain in or re-enter the workforce). The OECD notes that educational attainment between Japanese men and women is almost equal, yet a large wage gap persists. This implies diminishing returns on women’s education, which is inefficient from an HCT standpoint. In other words, Japan has built substantial female human capital (women are well-educated and in good health), but is not reaping the full economic returns on that investment due to structural barriers. HCT would suggest that removing these barriers – e.g. helping women maintain continuous careers, accumulate experience, and enter high-skill roles – would increase their productivity and thus wages, shrinking the gap. It also implies that women, anticipating career interruptions or discrimination, might invest less in certain skills (or choose fields with flexible hours but lower pay), creating a self-reinforcing cycle. Breaking that cycle (through policies we’ll discuss) would allow a more efficient use of human capital, benefiting both individuals and the economy. Japan’s case exemplifies how failure to integrate women fully into the economy represents lost human capital accumulation and output.
     

  • Sen’s Capability Approach: Amartya Sen’s framework shifts focus from income to what people are able to do and be. Applying this to Japan’s gender wage gap, we consider how the gap reflects a shortfall in women’s capabilities. Despite Japan’s economic advancement, if women face societal and workplace constraints (like pressure to quit jobs after childbirth, or limited career prospects), their real freedoms are curtailed. They may have the formal education and ability to work, but not the same freedom as men to achieve economic success. Sen would emphasize that development requires removing “unfreedoms” – in this case, gender-based constraints – so individuals can pursue lives they value. The wage gap is a manifestation of those unfreedoms, signaling that women are not enjoying equality in employment opportunities or rewards. For instance, if a woman in Japan has to choose a part-time low-paid job because full-time corporate culture is incompatible with her caregiving duties, her capability to earn a decent livelihood is reduced. This is a loss of welfare that isn’t captured by GDP alone. The Capability Approach thus frames closing the gender wage gap as expanding women’s capabilities. It resonates with policies like work-life balance initiatives, which increase women’s (and men’s) freedom to combine family and career. Moreover, Sen’s approach would point out that empowering women has multiplier effects: women with greater income and agency often invest more in their children’s health and education, leading to broader development gains (a well-documented phenomenon in development economics). In Japan’s context – a high-income country – the focus is less on basic health/education and more on higher-order capabilities: leadership roles, economic decision-making, etc. The underrepresentation of women in management and politics (only about 10% of executives in major Japanese companies are women, and similarly low ratios in parliament) indicates constrained capabilities. Reducing the wage gap is intertwined with increasing women’s “voice and agency” in society. Sen would argue that gender justice is a core part of development – Japan, despite its wealth, has room to develop in terms of gender equality. By ensuring women can flourish in the workplace (through equal pay for equal work, equal opportunities for advancement, etc.), Japan would advance not just economically, but also in terms of human freedom and dignity.
     

In summary, both theoretical lenses agree that Japan’s gender wage gap is a sign of inefficiency and inequity. HCT focuses on the lost economic output from underutilized skills, while the Capability Approach highlights the loss of freedom and well-being for women. Together, they make a compelling case that addressing the gap is crucial for sustainable, inclusive development.

 

References (APA style & Hyperlinked):

  • Aki Tanaka & Thelma Akpan (2023, September 12). Japan Addresses the Wage Gap by Requiring Gender Pay Gap Disclosure. Japan Society.
     

  • Kyodo News (2024, September 8). Women’s wages 70-80% of men’s in Japan as gender gap remains. Kyodo News.
     

  • OECD (2023). Gender equality and work: Key messages. OECD.org.
     

  • OECD (2024). Employment Outlook 2024 – Japan Country Note. OECD.
     

  • Voronoi/Visual Capitalist (2024, Mar 31). The Largest Gender Pay Gaps in OECD Countries.
     

  • CFR – Council on Foreign Relations (n.d.). Spotlight on Japan: Growing Economies Through Gender Parity.
     

  • International Monetary Fund (2023, Nov 13). Japan’s Economy Would Gain With More Women in Science and Technology. IMF News.
     

  • Nikolka, T. (2013). The Gender Wage Gap in OECD Countries. CESifo DICE Report, 11(1), 69-72.
     

  • Urabe, E. (2023, Sep 4). Women in Japan Do Over Half a Trillion Dollars More of Unpaid Housework Than Men. TIME/Bloomberg.
     

  • OECD (2012). OECD Employment Outlook 2012 – Gender wage gap data. (Referenced in Nikolka, 2013).
     

  • World Economic Forum (2023). Global Gender Gap Report 2023. (Used for contextual understanding of rankings).
     

  • Ministry of Health, Labour and Welfare, Japan (2023). Basic Survey on Wage Structure. (Data referenced via Kyodo News 2024).
     

  • Ministry of Internal Affairs and Communications, Japan (various years). Labour Force Survey. (Participation rates data referenced via IMF 2023)