Helena Lyng Blak
2 weeks ago

Empowering Women Could Boost Economic Growth, Says IMF Economists

Discover how gender equality initiatives could transform economies in Japan and Korea.
Washington, DC - June 04, 2018 — Photo by Bumble-Dee / DepositPhotos
Washington, DC - June 04, 2018 — Photo by Bumble-Dee / DepositPhotos

On Tuesday, May 21, 2024, anonymous sources revealed to Japan Today that the Japanese government is contemplating covering all medical expenses associated with childbirth in order to incentivize higher fertility rates. 

Right now, Japan ranks among the lowest in the world in terms of fertility with a rate of 1.26, and the rate continues to decline. Similarly, Korea is facing comparable issues with a fertility rate of just 0.72. As of 2021, the average fertility rate in OECD countries was 1.58. According to the BBC, approximately 30% of Japan’s population is now over the age of 65.

And a low birth rate is a major, economic concern.

But boosting birth rates may just be one piece of the puzzle for Japan and Korea to secure economic growth.

In an International Monetary Fund (IMF) article economists for the IMF’s Asia-Pacific Department, Kohei Asao, TengTeng Xu, and Xin Cindy Xu argue that much may be gained from empowering the female part of the population on a broad scale:

“Creating a supportive environment for women through family-friendly policies, flexible labor markets, and progressive social norms will yield economic gains,” they say.

They argue that many women may delay or entirely opt out of motherhood due to various factors unrelated to their desire to be mothers. 

The economists highlight, for one, that young women on a large scale encounter promotion delay after marriage and childbirth. 

They further observe the inequality when it comes to unpaid work; according to the article, women in Japan and Korea perform roughly five times more unpaid domestic work than their male counterparts. That is more than double the average gap in housework within OECD countries.

Additionally, they point to a culture surrounding work and employment that does not encourage child-rearing, with incredibly long, inflexible working hours and limited options in terms of childcare, which often leads women to part-time, and other non-regular employment with limited opportunity for promotion or skill development. 

However, despite these challenges, the female labor force participation in Japan and Korea is rising, and helping fuel post-pandemic growth and recovery. But further closing the gap may additionally aid the two markets. According to IMF analysis, closing the gap between men and women in the amount of hours worked to match the OECD average would boost Korea’s per capita GDP by as much as 18% by 2035. Another study revealed that narrowing the wide gap in Japan’s STEM fields could boost total factor productivity growth by 20%.

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