Learning from Womenonmics

Japan Prime Minister is best known for his economic revival strategy consisting of three arrows, collectively called Abenomics. His three arrows consisted of expansionary monetary and fiscal policies (the first two arrows) and structural and economic reforms (the third). This third arrow consisted of deregulation, trade liberalization, tax reform and industrial restructuring.

An important component of the third arrow was “Womenonmics”, getting more women into the workforce and in positions of leadership. Japanese women are highly educated on average, and indeed have a higher college enrollment than men. Japanese female participation rate has risen to 73% - slightly ahead of the US, it is still far below Sweden’s 88.3%. A recent government survey showed 63% of women quit their jobs disappointed by their career prospects. 70% of the women are not able to return to the workforce after the birth of their first child. The reasons include non-availability of quality childcare centres.

Female participation is crucial for Japan, since its population is declining and also ageing rapidly. The elderly will make up 40% of the total population by 2060, and the ratio of working to retired persons will be 1:1 by 2050. Unless women participate in much greater numbers to expand the workforce, the pension and tax burden will be crushing and will affect economic growth. Realizing this, Abe put in place numerical targets and tangible metrics in his “Womenonmics” strategy. He initially aimed to have 30% of leadership positions for women in government and business.

The “Womenonmics” plan also contains reforms like removing the tax penalty for working mothers, and introducing new training subsidies to help them return to the workplace. Even though India is not in the OECD peer group, there are lessons from Japan “Womenonmics”. The Indian parliament recently passed a landmark maternity benefits bill, which will benefit women returning to the workforce.

Beyond education, skilling, pay parity and board positions, India’s agenda also includes providing women leadership positions in political life. The recent violation experience in Nagaland, wherein the local community refused to let women enjoy 33% reservation in local government shows how far we have to go. This resistance to even constitutional mandates shows that there is as much a cultural hurdle as an economic policy hurdle to achieving progress for women.