One of the core aspects of Japanese Prime Minister Shinzo Abe’s Abenomics has been “womenomics,” which aims to put more women into the labor force in the hopes of increasing Japan’s growth potential.
Since Abe took the helm as prime minister in 2012, Japan’s female labor force participation rate has ticked up, climbing nearly 5 percentage points for those in the 25-54 age bracket over the past 5 years.
The basic thinking behind this strategy is that more women working means an increase in potential output and improvement in women’s income, which, theoretically, means that they will be able to spend more as consumers. (Not to mention the potential social benefits associated with greater financial independence.)
To illustrate how this push has played out, David Rosenberg, chief economist and strategist at Gluskin Sheff, recently shared a chart showing the total female participation rate and the 25-54 year old female participation rate. As you can see below, both rates have climbed since Abe took office.
“This may be one of the most bullish, and underappreciated, charts on the planet right now,” Rosenberg said in a note to clients. “[W]e are talking about the boom in the female participation rate in Japan here.”
“Bringing these individuals off the sidelines has underpinned a revival in aggregate income and helped buoy domestic demand,” he continued. “To give you an idea of just how important this has been, consider that had the 25-54 year old female participation rate held at 2011’s level of 71.5%, this segment of the labor force would have fallen by 601,000 workers instead of rising by 530,000…that’s a big swing! This delta of 1.13 million employees equates to roughly $44 billion in GDP (using per capita figures of $38,894 from the World Bank).”
Japan is generally seen as a country with an unfavorable demographic trend, …read more
Source:: Businessinsider – Finance