What Can Boost Female Labor Force Participation in Asia?

IMF Working Papers, March 16, 2015

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Both Japan and Korea are trying to boost female labor force participation (FLFP) as they face the challenges of a rapidly aging population.
Though FLFP has generally been on a rising trend, the female labor force in both countries is skewed towards non-regular employment despite women’s high education levels.
The paper empirically examines what helps Japan and Korea to increase FLFP by type (i.e., regular vs. non-regular employment), using the SVAR model.
The analysis compares Japan and Korea with two Nordic countries: Norway and Finland.

(i) child cash allowances tend to reduce the proportion of regular female employment in Japan and Korea
(ii) the persistent gender wage gap encourages more non-regular employment
(iii) a greater proportion of regular female employment is associated with higher fertility
(iv) there is a need for more public spending on childcare for age 6-11 in Japan and Korea to help women continue to work

Reassess the design of child cash allowances in Japan and Korea to avoid unintended reductions in regular female employment.
Address the persistent gender wage gap to reduce incentives for non-regular employment among women.
Expand public spending on childcare for age 6-11 in Japan and Korea to support continuous female employment and potentially raise fertility.
Consider policies that promote transitions from non-regular to regular employment to support both labor market attachment and family formation.

Subject: Employment, Gender, Gender inequality, Labor, Labor force, Women
Keywords: Asia and Pacific, country, Employment, female labor force participation, fertility, Gender inequality, impulse response, Japan, labor force, Labor force, labor market duality, Nordic country, seniority wage feature, wage, wage gap, Women, WP