Womenomics

November 2022

The Impacts of Japanese-Style Employment
Systems on Women
By Akari Yoshida
A lot of the issues concerning gender equality in Japan are strongly influenced by theJapanese style of employment. This paper explains the impact that the Japanesestyle employment has had on women and outlines proposals how to reform thesystem. It is divided into three sections. The first section describes the defining
characteristics of the Japanese-style employment, while the second section links
common gender issues such as the employment rate, insecurity of tenure, gender
pay gap, and the low number of women in leadership roles to this system. The thirdand last section identifies policy implications and proposals to address these.

The Male-Breadwinner Model: A Brief Overview
Japan’s rapid industrialization after World War II contributed to the growth andexpansion of the country’s unique employment system (Saito, 2013, p. 4). The

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Japanese employment system is characterized by lifetime employment and a senioritybased wage system for employee retention. It has no contract expiry and requires
long working hours and nonnegotiable job transfers in exchange for stable
employment and skills training.
Along with this set of Japanese-style employment practices, the strict division oflabor within the family was also established—men worked long hours outside thehome, while women were full-time housewives, shouldering both household andchildcare duties (Yoshizaki, 2018, p. 36). The gender-based labor segmentation inboth public (work) and private (family) spheres gave rise to the “male breadwinnermodel” (Shuto, 2013, p. 153).
The male-breadwinner model eliminated women in the workplace. It was a naturalconsequence for women to quit their jobs after marriage (Zhou, 2019, p. 40). It wascommon for companies to require married women to retire. Some companies evenset different retirement ages for women and men (30 years old for womencompared to 55 years old for men) (Omori, 2016, p. 3). The retirement age forwomen was fixed around the time that they get married. It was generally acceptedthat after marriage, women would quit their careers and focus on managing theirhouseholds and raising their families.
The employment model also created a gender gap in job duties. Male employees
were assigned to work in jobs with heavy responsibility, while women were assigned
to administrative support jobs, even if they were full-time employees. Companies did
not invest in training women workers (so-called “female office worker model”) (Wang,2017, p. 39) because once they get married, it is assumed that housework andchildcare will interfere with their ability to work. In short, in the Japaneseemployment system, which is characterized by lifetime employment, women were
excluded.
Economic fluctuations also highlighted the temporary nature of women
employment. When the Japanese economy was in the doldrums in the 1960s, firms
began to hire temporary workers to reduce labor costs. The situation created an
opportunity for housewives to reenter the workforce as contract workers. However,job insecurity remained as a concern because of the supplementary nature of thistype of employment. It was considered natural to terminate their employment when
the need for them ceased (Yoshizaki, 2018, p. 36). While the male nonworking
population varies regardless of the economy’s condition, the female nonworking
population clearly expands during economic downturns.
Housewives engaged in part-time work served as an employment adjustment valve,protecting the tenure of full-time male employees (Zhou, 2019, p. 30). Wives innonregular employment are put into poorly paid, volunteer-like work because theirhusbands are supposed to be financially guaranteeing their livelihood through theirsalaries. This wife-attached male-worker model provided a justification for companies
to demand longer hours from their male employees because the company is paying
both his and his wife’s wages through his salary, family allowance, and othercompensatory incentives.
The male-breadwinner model was further entrenched in the 1980s by a combinationof government fiscal and social policies. A tax-deduction scheme for the household
head was introduced, provided that the spouse’s salary is equal to or less than 1.03

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million JPY (around 9,000 USD). The spouse is taxed, and the deduction for the headof the household is reduced if the spouse’s salary exceeds the amount. In mostcases, the husband is the head of the household, so it falls on the wife to adjust her
income to not exceed the set upper limit. According to the Ministry of Health, Labourand Welfare’s (MHLW) 2011 survey of part-time workers, more than 60% of
respondents said that the reason for adjusting their employment was that theywould have to pay tax if their income exceeded 1.03 million JPY. In the same survey,
the distribution of the annual income of spouses shows that the annual income offemale nonregular employees peaks at around 1 million JPY (Adachi & Kaneda, 2016,p. 15).
The introduction of the “Japanese welfare society” government policy further
strengthened the male-breadwinner model. This social policy put a premium on thefamily, highlighting women’s role as the main providers of welfare. Tax and pension
incentives were given to women who worked part time but took on the main
responsibility of doing housework and childcare, taking care of her husband, caring
for elderly parents, etc. In addition, a stronger male-breadwinner model was createdby raising the limit of spouse exemption 1 in the tax system, introducing a special
exemption for spouses, 2 and creating a third insured person3 in the national pension
system. (Shuto, 2013, p. 154)
The decline of the male-breadwinner model began in the early 1990s with thecollapse of the bubble economy. A combination of stagnating incomes, rapid
population aging, and declining birthrate caused the decrease in the working
population (Zhou, 2019, p. 42). Companies responded to the changing economic anddemographic conditions by expanding nonregular employment while suppressing
wages. Average worker income continued to regress, with the average income in2010 dropping to the level last seen in the 1970s.
The Koizumi administration in the early 2000s, with its strong neoliberal aspirations,
made shifting away from the male-dominated model a basic policy of the Cabinet.
The government policy implied that the shift away from male-dominated economy
was compatible with market-oriented thinking. However, the Koizumi administration
failed to implement a specific policy to address these issues. Further, the welfare
system was already failing, and the number of unmarried people and birthrates
were also declining (Shuto, 2013, p. 155).

Persisting and Recurring Issues of Japanese Women in the
Workforce
1. If the taxpayer has a deductible spouse under the Income Tax Act, a certain amount of income
deduction is available.
2. Even if your spouse has an income of over 480,000 JPY (around 4,000 USD) per year and is not
eligible for the spouse deduction, you may be able to receive a certain amount of income deduction
depending on the amount of your spouse’s income.
3. Among the members of the national pension, spouses aged between 20 and 60 (people with anannual income of less than 1.3 million JPY, around 11,000 USD) who are dependent on the second insured
person, who is a member of the welfare-pension and mutual-aid association, are called “third insured
person.” The spouse’s employee pension-plan or mutual-aid association pays the premiums, so the third
insured person does not have to pay the premiums.

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Although the male-breadwinner model is in decline with the number of dual-earnerfamilies currently exceeding that of single-income households, the gender gap
persists. This section looks at the main issues that women in the workplace face.

Female employment-participation rate
The female employment rate is still lower compared to the male employment rate.
In 2020, the employment rate among 15–64 years old in Japan is at 70.6% for womenand 83.4% for men (Ministry of Internal Affairs and Communications, 2020).
In the recent years, male and female postgraduation employment rates are atsimilar levels (MHLW, 2021). However, Figure 1 shows that the gender gap starts
from age 25–29 years old and becomes larger when women reach 30–39 years old.
The M curb shows women leaving the labor market when they get married and/or
give birth and come back after their children start going to elementary school or
middle school.
Figure 1.
Labor-force participation rate by age group 1970, 1990, 2010, 2021

Note. Curbed graphs are women
Source: Japan Institute for Labour Policy and Training (JILPT) (2022)

Marriage and pregnancy are the primary reasons why women drop out of the labor
force. In a 2015 survey, 29% of women who quit their jobs because of pregnancy did
so spontaneously, while others were forcibly dismissed and left without an option.
The same survey found out that more than a quarter of women (25.5%) wanted tocontinue working but quit their jobs because of the difficulty of combining childcare
and nursing (JILPT, 2017, p. 105).
The low participation of men in household chores and childcare is the primaryreason why many women leave the workforce when they get married and/or
become pregnant. According to a 2018 research conducted by the National Institute4

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of Population and Social Security Research regarding housework time for husbands
and wives, husbands spend 37 min while wives spend 263 min (4 hr 23 min) on
weekdays, and husbands spend 66 min (1 hr 6 min) while wives spend 284 min (4 hr
44 min) on weekends. In other words, there is a seven-fold difference in the amountof time husbands and wives spend doing housework on weekdays and a four-folddifference on weekends (Figure 2).
The house-chores and childcare time-division rate is the lowest among the 33
countries surveyed, with Japan as the only country that has a husband-participationratio rate of under 20% (GESIS, 2012). The low participation rate of Japanese men inhouse chores and childcare is related to the long-held gendered ideas on labor.
Although more than half of men and women surveyed disagreed with the idea thatthe “husband should work outside while the wife should keep the house,” the figure
is quite low compared to other countries (see Figure 3). Although the international
comparative survey is several years old, recent domestic data indicate that no
dramatic changes have occurred since then (Gender Equality Bureau Cabinet Office,2018).
The reasons for this state of institutional inertia are multiple and complex. There isno incentive to change the gender division of labor, primarily because both socialand economic systems reward this conservative setup. For example, the tax
deductions are larger for households with full-time housewives. Instituting tax
reforms is also difficult because Japanese politics is dominated by elderly men who
benefit most from these tax deductions.
Figure 2.
Average time spent by husbands and wives on housework

Source: National Institute of Population and Social Security Research (2018)

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Figure 3.
Awareness of traditional gender roles (“A husband should work outside, while a wife should
be full-time homemaker”)

Source: Gender Equality Bureau Cabinet Office (2003)

High number of women in nonregular, lower paid work
Even though, the women employment rate has surpassed that of the United Statesand some European countries (Goldman Sachs, 2019), more than half of women in
the workforce are in nonregular employment, compared to only 20% of men. These
women who are in part-time positions are often married. They do not start out as
temporary workers, rather they become one after they drop out of full-time
employment after marriage or pregnancy.
Nonregular workers often have lower salaries, less stable jobs, and low careerbuilding prospects compared to regular workers. In addition, women are also paidless compared to men. Japan has a 23.5% gender wage gap, the second biggest gap
among Organisation for Economic Co-operation and Development (OECD) countries.

Low number of women in leadership roles
The percentage of women in management positions is low. While the employment
rate of women is above the OECD average, it is significantly lower than othercountries when it comes to the percentage of women in management positions (seeFigure 4).

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Companies included in the survey conducted by the Ministry of Health, Labour andWelfare survey in 2013 cited three factors for the lack of or low number of women in
managerial positions. First, they assert that “there are no women with the necessary
knowledge, experience and judgment” that can fill in the position. Second, theyargue that “although there are women who have the potential to be in managerial
positions in the future, none of them currently have the years of service required to
be in managerial positions.” And lastly, companies argue that women “leave theworkforce before they become managers.” These factors do not justify the low
number of women managers. Instead, these factors highlight the gender-related
barriers that women oftentimes fail to overcome to land leadership roles in theworkplace.
Figure 4.
Employment ratio and ratio of woman manager (2019)

Source: Gender Equality Bureau Cabinet Office (2020)

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Figure 5.
Gender inequality in the proportion of those in managerial/supervisory positions (2009)

Source: Yamaguchi (2014).

Yamaguchi (2014) asserts that in Japan, gender plays a bigger role compared toeducational background and other factors in determining whether a person can geta managerial position. Kato et al. (cited in Yamaguchi, 2014) found that longer
working hours and performance evaluation results are skewed against women. Long
working hours do not increase promotion rates for men but have a significant
impact on promotion rates for women. This implies that for women, long working
hours are a requirement for management positions. But women are constrained
from working long hours by the longer and largely disproportionate amount of timethat they must devote to housework and childcare compared to their malecounterparts. In addition, the heavy burden of housework and childcare often leadmost women to either deprioritize their careers or give this up entirely.
However, pull factors such as marriage, childbirth, and childcare are not the only
factors affecting women’s ability to rise to leadership positions. Osawa (in Sugiura,
2012, p. 112) pointed out that 35% of women without children have also temporarily
or completely left the labor market. A 2011 survey comparing Japan and the UnitedStates found that Japanese women resigned from their jobs due to so-called pushfactors, such as dissatisfaction with their jobs and dead ends. Osawa conjecturesthat the push factor for women quitting the labor force is due to a dissatisfaction
with their jobs. The dissatisfaction may stem from the fact that companies do not
assign important jobs to female employees based on the assumption that they willquit soon. In addition, since women are not entrusted with high-responsibility
positions, capacity-building opportunities that will build their “necessary knowledge,
experience, and judgement” are either unavailable or withheld from them. So
women’s performance is often evaluated lower compared to their male peers.
Further, women are also placed in positions with lower opportunities for promotion
regardless of their performance. These elements perpetuate the cycle where highperformance-evaluation results increase the promotion rate for men but not for
women.

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The lack of women leaders in the corporate sector is also mirrored in the politicalsphere. The current percentage of women in leadership positions is only 10.1% formembers of the House of Representatives (2019).
Gender bias, including the perception that “politics is for men,” is a major reason
why there are few female politicians. Women politicians’ winning rate is lower thanthat of male politicians because the public do not vote for them with the bias.
Women also do not consider politics to be a viable career option because they fearthat they cannot balance their activities as a politician with housework and childcare.
Aside from these perceptions, the barriers to entry for women who are interested inpolitics are too high. Local assemblies are the primary entry point for Japanesepoliticians. However, these are often characterized as “old boys’ clubs,” where female
politicians are often discriminated against and sexually harassed. In instances wherefemale politicians rise above these circumstances, they often pose additional
barriers to other aspiring female politicians. Since there are so few womenpoliticians, women politicians gain a privileged position, and some do not want toincrease the number of potential rivals.
On July 17, 2020, considering that the current situation is far from the target, theJapanese government announced giving up their 202030 policy (by 2020, 30%) which
set the goal to have 30% of women in leadership positions by 2020. The government
declared that this goal is “impossible” to achieve in 2020 and postponed thefulfillment date of its target to “as early as possible by 2030.”
In 2020, there are only 11.8% of women in management positions (data from MHLW,
2018). The reasons behind this low rate of female managers is greatly influenced by
the view of gender roles that “women are responsible for housework and childcare.”
In a survey conducted by a private company in 2021, 81.1% of respondents cited thereason of low female managers rates as “an atmosphere that makes it difficult tocontinue in management after marriage or childbirth.” In addition to that, various
other discrimination against women, such as the gender wage gap, and the lack ofexperience in responsible work based on the company's assumption that women
will quit after childbirth, etc., affect the low ratio of women in managerial positions.

Policy Reforms and Their Impact
The policies intended to address the issues that women in the workplace struggle
with are related to breaking the Japanese-style of employment: (1) policies that aim
to reduce work hours and encourage men to take a more active role in care work, (2)policies that seek to abolish the seniority system, and (3) policies that establish equalpay for equal work. These policies have been formalized in the Basic Plan for Gender
Equality that was formulated in 2000. The plan is reviewed every five years and is in
its fifth iteration in 2020. On paper, the government stresses that it recognizes theglaring gender gap in the workplace, but whether the policies that it has
implemented is enforceable or effective remains to be seen.

Reducing work hours and encouraging men’s active role in care work
Recent work-style reforms have been implemented in attempts to reduce working
hours and to prevent death from overwork (karoshi). Although working hours are

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decreasing annually, Japan still has one of the longest working hours compared toother OECD countries such as France, the United Kingdom, and Germany.
The Labour Standards Act was amended in 2019 to establish a maximum overtime
rule. From April 2019, overtime was capped at 45 hours per month and 360 hours
per year, and employers who break the overtime limit will be subjected to a penalty
of up to six months’ imprisonment or a fine of up to 300,000 JPY (around 2,500 USD).
Large companies (with 301 or more employees depending on the industry) andsmall- and medium-sized enterprises (with less than 300 employees) were also
targeted. In addition, companies that violate the Labour Standards Law will be
publicly shamed by having their names and the details of their violations publishedon the Ministry of Health, Labour and Welfare’s website.
Although the explicit goal of these work-style reforms is to encourage work-lifebalance (and largely prevent extreme effects of overwork such as grave illnesses anddeath), the implicit goal is to nudge more men to be more involved in theirhouseholds and take up a larger share of the housework and childcare. Researchsuggests that there is a correlation between the length of working hours and men’s
participation in childcare and housework. Working fathers (respondents’ average
working hours at 47 hours a week ) spend an average of 6.2 hours a week onhousework, compared to only 4.8 hours for those who work 60 hours or more aweek. They also spend an average of 9.3 hours a week on childcare, compared toonly 7.1 hours for those who work 60 hours or more a week.
Between 2006 and 2016, men’s household-related time (housework, caring forfamily, childcare, shopping) increased by 6 minutes per day (or an increase of 36.5
hours per year) over a 10-year period (MHLW, 2016). Although women’s time spent
on housework has decreased by 10 minutes per day over the same period, asignificant gap persists (see Figure 6).
Figure 6.
Changes in time related to housework by gender per week 1996–2016

Source: Ministry of Internal Affairs and Communications - Statistics Bureau (2016).

Housework, childcare, and nursing care are largely seen as women’s roles. The
gendered division of labor is rooted in underlying social norms as previously
explained. The government tried implementing policies that promote men’s

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participation in child rearing. For example, Japan ranks second (only behind South
Korea) in having the longest childcare-leave period and largest number of benefits.
However, a large majority of male employees do not take childcare leave. In 2019,about 83% of women took childcare leave while only 7.5% of men took time off (seeFigure 7). In addition, about 90% of female employees who took childcare leave take6 months or more, while about 80% of male employees who took childcare leavetake less than one month (MHLW, 2020).
Men do not take childcare leave partly because of the work culture. Paternity
harassment of the improper treatment by bosses and colleagues when a man
applies for childcare leave is common. A Japan Federation of Trade Unions survey(2019) found that more than 20% of men who took paternity leave have experienced
paternal harassment, such as being refused a promotion or being ordered torelocate. Taking childcare leave is counted against a man’s career and prospects for
improvement—the opportunity costs are simply too high.
The Childcare and Family Care Leave Act was revised in 2021 to address this. The law
requires companies to inform all employees about the maternity leave and childcare
leave system and confirm employees’ intention to take it. The law also requires
companies to publish their paternity-leave take-up rates annually. Although thiswould encourage companies to be more transparent, the requirement is only
applicable to big companies with more than 1,000 employees; small and medium
sized companies can opt out of the regulation.
Figure 7.
Percentages of workers taking childcare leave

Note. The 2011 data excludes Iwate, Miyagi, and Fukushima prefectures.
Data Basic Survey of Gender Equality in Employment Management 2019

Abolishing the seniority system
Losing global competitiveness and the push to secure better human resources are
the main reasons of the seniority system’s decline. In 2019, the chairman of
Keidanren (Japan Business Federation) and the president of Toyota Motor

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Corporation, one of Japan's leading global companies, said that it would be difficult
to protect lifetime employment. Their declaration marked a turning point because
despite global trends, many Japanese companies still practice lifetime employment
and its adjunct age-based salary system.
In Japan's seniority system, the longer one has been with the company, the higher
one's chances are for promotion, regardless of ability. In other words, even if you
have the ability, if you take a leave or leave for childbirth or childcare, there will be a
big delay in promotion due to the length of service even after returning to work.
Therefore, by making the promotion system based on ability rather than seniority,
women who return to work after childbirth or childcare will be able to be promoted
according to their ability, regardless of their length of service.

Establishing equal pay for equal work
Figure 8 shows that in Japan, the wage of part-time workers is about 40% less thanfull-time workers. The latest policy in a series of efforts to establish equal pay for
equal work was the Work Style Reform Implementation Plan announced in 2017, anda bill related to work style reform was submitted to the Diet in 2018. This billprohibits unreasonable differences between the treatment, such as basic pay andbonuses, of regular employees and nonregular employees in the same company.
The law took effect in April 2020 for large companies and in April 2021 for small andmedium-sized companies.
Figure 8.
Wage levels for part-time workers (2016)

Note. Full time = 100
Source: Tsuru (2016)
Although the principle of equal pay for equal work is enshrined in the law, only
guidance from the labor department is given. This guidance appears to be
insufficient, considering that a survey of companies, months before the law’s
implementation, indicated that they are not prepared and, in some cases, are unable

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to implement the law4 due to increased labor costs and the perception thatcompanies are unable to agree on a standard for classifying equivalent jobs. Thisbottleneck stems from the discretion of Japanese companies to freely determine
their respective working conditions and wage systems. In addition, there are no
penalties for noncompliance. Going to court and asking for damages, in most cases,is the employees only course of action against companies’ noncompliance.
The law “corrects the unreasonable disparity between regular and non-regular work(balanced treatment),” but it is not "equal pay for work of equal value” (parity oftreatment) (Yamada, 2021). For example, a regular employee doing the same job forthe same amount of time as a part-time worker and getting a higher salary than apart-time worker is okay because of different assumptions, such as different future
career tracks for regular employees and part-time workers. In other words, the law
does not require that “if the labor is the same, the same wage is paid.” This is due to(1) both wage and treatment disparities and (2) differences in compensation benefits
such as commuting and family allowances (Mizumachi, 2019).
Mizumachi (2019) proposes the following policies to rectify the pay disparities: (1)provide benefits and allowances to nonregular workers, (2) provide bonuses andseverance pay to nonregular workers, and (3) provide basic pay to nonregular
workers. First, benefits such as health check subsidies, commuting allowances, lunch
subsidies, and others should be provided to nonregular workers as well. Second,
bonuses and severance pay should be given to temporary workers as well. However,this proposal continues to be a divisive issue. In 2020, there two major cases wherecompanies were sued by nonregular employees. In the first case, a part-time worker
who worked the same amount of time as full-time workers received no bonus salary.
In the second case, a contract-based employee doing the same job as regular
employees and had worked for 10 years received no severance pay. In both cases,
until the second trial, it was judged as “it is unreasonable for not paying
bonus/severance pay,” and the lower court said that 60% of the bonus and 25% of
the severance pay should be paid for each case. However, when the case reached
the Supreme Court, the decision was overturned in both cases. And lastly, the basic
pay system should be extended to nonregular workers.

Conclusions
The Japanese-style employment is a “male-centered labor practice,” meaning thatcompanies require employees to work long hours and accept company-orderedtransfers. This was based on the premise that the employee in the Japanese-style
employment does not have to allot their time for care work because there was aperson who could take care of all this—the full-time housewife. In other words,
women who still often carry out care work are alienated by the Japanese-style

1. A survey of large companies conducted three months before the law came into force showed that
8.2% had already taken action, 34.5% were planning to take action and 10.8% had not. In addition, in asurvey conducted on SMEs in January 2021 three months before the enforcement to SMEs, 28% of thecompanies answered that they had completed equal pay for equal work, and 29% of companies answeredthat they are considering measures/do not know what to do (NHK, 2021).

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employment. In addition, women are ancillary in the company because theassumption that "women will quit after marriage and childbirth" remain.
Currently, Japan has launched some projects aimed at promoting women, such as“202030,” with the goal of increasing the percentage of women in management
positions to 30% in 2020. However, most of those projects have failed. Projects suchas these can be compared to a software. A newly installed software will not properly
work if the operating system is not updated. Japan needs to update its operating
system—the fundamental part of the society before installing those “software.”
Reforming the Japanese-style employment is a major step in that update.
The strong Japanese-style employment that has existed for more than half a century
can be abolished by (1) reducing work hours, (2) abolishing the seniority system, and(3) establishing equal pay for equal work. These recommendations on the surface
are proposals for labor reform, but these are male-centered labor practices, andreforming them will be the basis for promoting the active participation of women.

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Regional Economic Programme Asia (SOPAS)
Coordination: Cristita Marie Perez, Senior Programme Manager
Sakuya Iwakawa, Programme Management AssistantNovember 16, 2022

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