Japan’s Labor Market Has a Lesson for the Fed: Women Can Surprise You

Japan’s economy has rocketed into the headlines this year as inflation returns for the first time in decades, workers win wage gains and the Bank of Japan raises interest rates for the first time in 17 years.

But there’s another, longer-running trend happening in the Japanese economy that could prove interesting for American policymakers: Female employment has been steadily rising.

Working-age Japanese women have been joining the labor market for years, a trend that has continued strongly in recent months as a tight labor market prods companies to work to attract new employees.

The jump in female participation has happened partly by design. Since about 2013, the Japanese government has tried to make both public policies and corporate culture more friendly to women in the work force. The goal was to attract a new source of talent at a time when the world’s fourth-largest economy faces an aging and shrinking labor market.

“Where Japan did well over the recent decade is putting the care infrastructure in place for working parents,” Nobuko Kobayashi, a partner at EY-Parthenon in Japan, wrote in an email.

Still, even some who were around when the “womenomics” policies were designed have been caught off guard by just how many Japanese women are now choosing to work thanks to the policy changes and to shifting social norms.