Policy Recommendations for Closing the Gap and Promoting Inclusive Growth
On the basis of the above analysis, how should Japan's gender wage gap be closed and its economic growth inclusive of women's abilities? A multi-faceted approach – no single policy will solve this entrenched issue, but a combination of several might make a big impact. The following are some key policy recommendations:
Enhance Pay Transparency and Enforcement: Building on the 2022 law mandating pay gap disclosures for large corporations, Japan can broaden and enact pay transparency. That could include extending this requirement to smaller enterprises (the government is considering lowering the threshold to businesses with 100+ workers) and opening reports to the public. Open information creates pressure on employers to account for disparities and typically results in internal audits. Second, labor regulators must be able to investigate and punish instances of unjustified pay disparities or discrimination. Mandating gender pay audits as a routine exercise (as in the UK and certain EU nations) will allow firms to find out where women are paid less for equal work and do something about it. In short, "sunlight" as disinfectant, supported by legal teeth, will nudge firms towards more equitable pay structures.
Promote Work-Life Balance for All (Normalize Paternal Leave for Men): Policy-making to reconcile caregiving tasks is necessary to address the root causes of the gap. In theory, Japan boasts one of the world's most generous parental leave systems (both parents can take up to or more than a year with some wage replacement), but fathers' utilization is extremely low. The introduction of use-it-or-lose-it paternity leave (a specific block of leave that can only be taken by the father, or it expires) has worked in Scandinavia. Japan might introduce a similar system to get men to take at least a few months off for babies. Public campaigns and business leadership backing are also required to cut stigma around men taking leave. Further, limiting overtime and enforcing Work Style Reform legislation (which places ceilings on excessive work hours) will make it easier for both parents to balance family and work. By making the workplace more adaptable – encouraging teleworking, flexible hours, and outcome-based performance reviews instead of face-time – employers can retain smart women (and caregiving men) on their payrolls and allow more women to stay on career tracks. Essentially, work culture must shift from numbers of hours worked to productivity, which benefits everyone and particularly those with caregiving responsibilities at home.
Invest in Childcare and Elder Care Infrastructure: The government should continue to expand the availability of quality childcare. That includes not only opening more day-care centers but providing longer hours to accommodate regular work schedules, and further support for after-school programs for older kids. Subsidies or tax credits make childcare affordable, so it is not economically foolish for a second earner to work. Also, as the Japanese population ages, many workers (typically women) end up with caregiving responsibilities for the elderly. Reducing barriers to elder care services (such as day services or home helpers) would relieve pressure on families and enable women to remain in full-time work. A good indicator is to aim for "no waiting lists" for childcare – something that can be pointed to with pride by cities like Stockholm. If Japan can eliminate childcare shortages, it removes a major barrier to women's continuous employment, which will in turn help reduce the pay gap by keeping career breaks to a minimum.
Reform the Tax and Benefits System to Promote Work: Any remaining elements of the tax or social insurance that deter dual-earner families need to be eliminated. The spousal tax deduction threshold, which previously led many women to restrict earnings, has been raised, but Japan may want to abolish it in favor of individual-based taxation (to avoid discrimination against one earner staying below a threshold). Side by side, dependent coverages and pension benefits should not penalize a second earner. Ensuring each earned yen has its value, without a cliff on which the benefit is lost, women would strongly be motivated to achieve full employment and income levels.
Give Career Progression and Representation to Women: Breaking the glass ceiling would be achieved by active sponsorship of women's promotion in firms by both public and private. This could include training and mentoring for women's leadership, women's targets or temporary quotas for managerial positions, and the obligatory revelation by companies of not only pay gaps but gender balance in the hiring and career advancement processes. The government may also lead the way by increasingly promoting women into senior roles within the civil service and public administration. In addition, occupational segregation must be addressed: encourage and support women in the sciences, technologies, engineering, and mathematics disciplines and high-growth industries through scholarship, mentorship, and discouraging gender stereotyping in school. Japan's Society 5.0 and digital transformation visions provide opportunities to involve more women in tech disciplines. Incentives to companies that recruit or develop women in minority regions (e.g., allowances or public praise awards) could be used if needed. Over time, as more women assume leadership roles, they can become role models and mentors, creating a positive feedback loop.
Transform Cultural Norms via Education and Media: Policies will not suffice if minds in society retain conservative values. Japan needs to create awareness campaigns about the importance of gender equality in the workplace and in the home. This can start in schools – incorporating gender equality into school curricula, encouraging boys and girls to consider a variety of family and career roles. In popular culture and media, the production and distribution of images and stories of active fathers, women in authority roles, and two-career families thriving can change "normal" assumptions over time. Some Japanese local governments and companies have initiated fatherhood promotion campaigns, and this is a heartening start. The government can make public announcements of targets and commend "family-friendly" companies to shame the old culture of thinking only women do housework or only men are businesspeople. It is hard work to change deeply ingrained culture, but Japan has proved it can do so in the past (e.g., attitudes toward smoking, conservation). Public pressure for action could be built by consistent effort to make gender equality a national indicator of progress.
It will require coordination across ministries (Labor, Education, Finance, etc.), and with the private sector and civil society. It's also important to monitor and measure progress – continue gathering data on wages, promotions, time spent at home – to hold institutions to account and make policy changes as needed. The upside is that all of these ideas are mutually supporting: for example, more childcare enables more women to work full-time, creating a pipeline for female managers, which in turn makes women as leaders the default and undermines stereotypes. Likewise, if more men take paternity leave and divide childcare, women can put more time into their careers, widening the gap yet further. The end goal is to create an atmosphere which allows women to contribute to the economy to their optimal level, and proportionately receive benefits.
References
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Aki Tanaka & Thelma Akpan (2023, September 12). Japan Addresses the Wage Gap by Requiring Gender Pay Gap Disclosure. Japan Society.
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Kyodo News (2024, September 8). Women’s wages 70-80% of men’s in Japan as gender gap remains. Kyodo News.
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OECD (2023). Gender equality and work: Key messages. OECD.org.
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OECD (2024). Employment Outlook 2024 – Japan Country Note. OECD.
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Voronoi/Visual Capitalist (2024, Mar 31). The Largest Gender Pay Gaps in OECD Countries.
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CFR – Council on Foreign Relations (n.d.). Spotlight on Japan: Growing Economies Through Gender Parity.
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International Monetary Fund (2023, Nov 13). Japan’s Economy Would Gain With More Women in Science and Technology. IMF News.
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Nikolka, T. (2013). The Gender Wage Gap in OECD Countries. CESifo DICE Report, 11(1), 69-72.
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Urabe, E. (2023, Sep 4). Women in Japan Do Over Half a Trillion Dollars More of Unpaid Housework Than Men. TIME/Bloomberg.
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OECD (2012). OECD Employment Outlook 2012 – Gender wage gap data. (Referenced in Nikolka, 2013).
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World Economic Forum (2023). Global Gender Gap Report 2023. (Used for contextual understanding of rankings).
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Ministry of Health, Labour and Welfare, Japan (2023). Basic Survey on Wage Structure. (Data referenced via Kyodo News 2024).
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Ministry of Internal Affairs and Communications, Japan (various years). Labour Force Survey. (Participation rates data referenced via IMF 2023)