The economic benefits of family policies and norms for women in Japan and Korea

Women in Japan and Korea face significant challenges in balancing their work and family lives. Pressures arising from delays in promotions after marriage, the unequal division of domestic labor and insufficient childcare facilities create significant obstacles.

Additionally, the financial burden of raising children, including the costs of larger living spaces and a competitive education, influences many couples to delay marriage and childbearing. As a result, fertility rates in Korea and Japan have fallen to 0.72 and 1.26, respectively, among the lowest in the world. Despite these challenges, there are potential economic benefits to creating supportive environments for women through family policies, flexible labor markets, and progressive social norms.

A major factor contributing to low fertility and significant gender gaps in employment and wages in both countries is the social expectation that women perform unpaid domestic and care work. Women in Japan and Korea do five times more unpaid work than men, more than double the average gap seen in OECD countries. This disparity is compounded by fathers’ low utilization of paternity leave, despite generous benefits.

The duality of the labor market, where a large proportion of women are employed in temporary, part-time or other types of non-regular positions, makes their career advancement even more difficult. Women who leave the workforce to care for their children often return to these less stable jobs with limited opportunities for career growth. Seniority-based promotion systems in both countries also disadvantage mothers returning to work.

Furthermore, the work environments in Japan and Korea are not conducive to balancing career and family life. Long work hours, inflexible schedules, and limited teleworking options make it difficult for women to manage their professional and childcare responsibilities.

In response, the governments of Japan and Korea have implemented policies to support women, such as improving childcare facilities and maternity leave provisions. However, more comprehensive efforts are required by governments, companies and society.

First, reducing the prevalence of non-regular employment and promoting merit-based promotions and job mobility can significantly benefit women’s career growth. An analysis of the International Monetary Fund (IMF) suggests that reducing severance payments for regular workers in Korea could increase women’s labor force participation by 0.9 percentage points and productivity growth by up to 0.5 percentage points.

Japan and South Korea strengthen ties on the eve of the 60th anniversary of the normalization of diplomatic ties

Expanding child care facilities and encouraging fathers to take paternity leave through stronger incentives is also crucial. Japan’s fertility rate stabilized after expanding child care facilities more than a decade ago. Recent IMF studies indicate that further increasing these facilities would have a positive impact on both fertility and women’s career advancement.

Additionally, cultural changes in the workplace are necessary. Expanding teleworking and flextime arrangements can increase women’s workforce participation and allow men to share more household responsibilities.

Rising female labor participation has already contributed to post-pandemic growth recovery in Japan and Korea. Further narrowing the gender gap could result in substantial economic benefits. IMF analysis suggests that reducing the gender gap in hours worked in Korea to the OECD average by 2035 could increase the country’s GDP per capita by 18 percent. Closing the gender gap in science, technology, engineering and mathematics (STEM) fields in Japan could increase total factor productivity growth by 20 percent and social well-being by 4 percent.

Adopting policies that close gender gaps and promote progressive cultural norms in Japan and Korea can increase economic growth potential and offset demographic challenges. These measures would allow women to balance their family and professional aspirations, contributing significantly to their economies and societies.