Employment Expansion, Wage Increases, and More Equal Opportunities: The Suspicious Disregard of Strong Labor Market Performance in Japan

We assess the state of Japanese capitalism by taking a fresh analytic look into its labor market. Our findings strongly indicate that the general dictum of »lost decade(s)« stands in stark contrast to economic reality. What is more, we find that the purported view of strong and rigid gender inequalities in the labor market is entirely flawed.

Analyzing employment and wage data for the period from 1988 to 2010 we find that the Japanese economy has seen very stable employment conditions in a long-term perspective. In fact, Japanese businesses have created some 10.1 million more jobs than were to be expected if the 1988 labor force participation rates of both sexes had stayed constant. 1.4 million of these additionally created jobs are jobs in regular employment, and what is more, 0.9 million of these newly created regular jobs are occupied by women. Increasing labor market participation by women reportedly largely went into non-standard employment. While this is essentially true, we can evidence a strong tendency toward closing wage gaps both between men and women, and between regular and non-regular employment. As the latter effect is particularly strong for women, we cannot draw any evidence for any petrified gender inequalities for our investigation period. On the contrary, our findings suggest that women have made significant inroads into formerly male-dominated regular employment.

Hypothesizing about potential reasons for this bias, we suggest (a) that this negative perception stems from a general “adaptation problem” referring to the transition from high to low-growth economy, and (b) that the ongoing strong prevalence of the societal ideal of a male breadwinner in Japanese society effectively forecloses a positive appraisal of young women increasingly finding their way into regular employment where this happens at the expense of men.